Trade, growth and wage inequality in Bangladesh

Hiranya Nath and Khawaja Saeed Mamun

The Journal of International Trade & Economic Development, 2007, vol. 16, issue 4, 505-528

Abstract: Using model selection techniques based on out-of-sample predictive ability criterion in a Vector Autoregression (VAR) framework, this paper empirically examines the causal relations among growth, trade, and wage inequality in Bangladesh between 1971 and 2000. There is some evidence of bi-directional causality between growth and inequality and between trade and growth. That growth causes trade and that trade causes inequality are robust results. Furthermore, evidence strongly suggests that investment is important for trade, and the terms of trade between agricultural products and manufacturing products is an important causal determinant of both growth and trade.

Keywords: Bangladesh; trade; trade openness; wage inequality; out-of-sample predictive ability; mean squared forecast errors (search for similar items in EconPapers)
Date: 2007
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Working Paper: Trade, Growth and Wage Inequality in Bangladesh (2006)
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DOI: 10.1080/09638190701600256

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