Volume 4, Issue 1, February 2015, Page: 1-10
Domestic Demand, Export and Economic Growth in Bangladesh: A Cointegration and VECM Approach
Md. Khairul Islam, Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh
Md. Elias Hossain, Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh
Received: Jan. 13, 2015;       Accepted: Jan. 25, 2015;       Published: Jan. 30, 2015
DOI: 10.11648/j.eco.20150401.11      View  2866      Downloads  348
Abstract
Using cointegration and error-correction mechanism techniques, this paper investigated the causal relationship between domestic demand, export and economic growth using data pertaining to Bangladesh’s final household consumption and government consumption as a measure of domestic demand, real exports, and real GDP over the period 1971–2011. It is found that final household consumption, final government consumption and export influence short-run and long-run economic growth. Thus, there is a dynamic relationship among domestic demand, export, and economic growth in Bangladesh. Moreover, economic growth in Bangladesh has an impact on its domestic demand and exports in the short-run, but in the long-run economic growth has an impact on final household consumption only.
Keywords
Domestic Demand, Export, Economic Growth, Cointegration, VECM, Bangladesh
To cite this article
Md. Khairul Islam, Md. Elias Hossain, Domestic Demand, Export and Economic Growth in Bangladesh: A Cointegration and VECM Approach, Economics. Vol. 4, No. 1, 2015, pp. 1-10. doi: 10.11648/j.eco.20150401.11
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