Urbanization and Income inBangladesh: An Empirical Analysis

Rasheda Khanam and Md. Shariful Islam ()
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Md. Shariful Islam: Assistant Professor, Department of Economics, Bangladesh University of Professionals(BUP), Mirpur Cantonment, Dhaka-1216.

Journal of Business, 2019, vol. 4, issue 2, 19-27

Abstract: This paper investigates the causal relationship between urbanization and per capita income of Bangladesh for the sample period of 1972-2018. Both the Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests are applied to find the existence of unit root in each of the time series data collected from World Development Indicators (WDI). To observe the long-run relationship between urbanization and per capita income this study relies on Johansen-Juselius cointegration technique. Empirical results of this paper confirm the presence of long-run relationship between the variables. The Granger causality test shows that causality between urbanization and per capita income is bi-directional. Impulse Response Function and Variance Decomposition analyses are performed for robustness check.

Keywords: Urbanization; Per Capita Income; Johansen-Juselius cointegration technique; Long-run Relationship; Granger Causality Test. (search for similar items in EconPapers)
JEL-codes: O10 O11 O18 P25 Q01 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:lrc:larjob:v:4:y:2019:i:2:p:19-27

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