 Monetary policy, output and inflation in Bangladesh: a dynamic analysisAbdur Chowdhury (), Minh Dao and Abu Wahid Applied Economics Letters, 1995, vol. 2, issue 3, 51-55 Abstract: This paper investigates the relationship between money, prices, output, and the exchange rate in Bangladesh during the 1974-92 period. Several interesting conclusions can be derived from the paper. First, the inflationary process in Bangladesh cannot be explained exclusively by the monetarist or the structuralist explanation of inflation. Second, regardless of the monetary aggregate employed, monetary policy exerts a significant unidirectional impact on real output. Third, monetary policy and inflation together account for a significant portion of fluctuations in the exchange rate. Finally, it is noted that monetary shocks have a strong, but relatively short-run, impact on inflation. In light of these findings, it can be concluded that monetary policy in Bangladesh should be carried out with extreme caution. While tight money may put a short-term halt to inflation and help stabilize the foreign trade sector, it may also cause a slowdown in the economy. Date: 1995 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:2:y:1995:i:3:p:51-55 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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