Long Run Relationship and Causality between Education and Economic Growth in Bangladesh

Kazi Mostafa Arif, Munshi Murtoza Ali and Md. Alamgir Hossain Bhuiya

Journal of Empirical Economics, 2015, vol. 4, issue 6, 324-336

Abstract: This paper focuses on the long-run relationship and causality between government expenditure in education and economic growth in Bangladesh for the period 1973 to 2009 through the application of Johansen Cointegration technique and Vector Error Correction Methodology and causality is tested through Granger Causality approach. The Johansen Cointegration result establishes a long run relationship between education and economic growth. With regard to the Granger causality relationship, the result confirms the unidirectional causality running from GDP to education expenditure. On the basis of the findings of the study, it is recommended that, if government policy is going to substantially increase growth, then investing in education is one of the pro-growth policies for promoting economic growth.

Keywords: Government Expenditure; Economic growth; Johansen Cointegration; Vector Error Correction Methodology; Granger Causality. (search for similar items in EconPapers)
Date: 2015
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