The Remittance-GDP Relationship in the Liberalized Regime of Bangladesh: Cointegration and Innovation Accounting

Biru Paksha Paul and Anupam Das
Additional contact information
Biru Paksha Paul: State University of New York
Anupam Das: Mount Royal University

Theoretical and Applied Economics, 2011, vol. XVIII(2011), issue 9(562), 41-60

Abstract: Bangladesh, being one of the top remittance-recipient countries in the world, has drawn attention to the remittance-output relationship in recent years. The results on this aspect are nevertheless inconclusive. Working on a relatively liberalized regime from 1979 to 2009, this study finds a long run positive relationship between remittances and GDP in Bangladesh. The adjustment of this relation, however, goes against traditional belief in that GDP does not respond to the movements in remittances while correcting disequilibrium after a shock in the system, but the reverse is true. There is no evidence on remittance-led growth in the short run. Innovation accounting shows that the impact of output on remittances is remarkably stronger than that of remittances on output. These findings have policy implications for other emerging nations in that GDP growth is capable of attracting further remittances arguably through increasing investment demand and initiating institutional reforms in the economy.

Keywords: remittances; GDP; Bangladesh economy; cointegration; impulse responses; variance decompositions. (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://store.ectap.ro/articole/636.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=636&rid=78 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:9(562):y:2011:i:9(562):p:41-60

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().