TITLE:
Revisiting Exports, Imports and Economic Growth Nexus: Empirical Evidence from Bangladesh (1981-2017)
AUTHORS:
Md. Sazib Miyan, Md. Nurul Kabir Biplob
KEYWORDS:
Economic Growth, Exports, Imports, Johansen Co-Integration test, VECM, Granger Causality, Bangladesh
JOURNAL NAME:
Modern Economy,
Vol.10 No.2,
February
26,
2019
ABSTRACT: This
study is conducted to revisit the empirical relationship between exports,
imports and economic growth in Bangladesh using annual time series data from
1981 to 2017. To capture the objective, the study used Johansen Co-integration
test and Granger-causality test in Vector Error Correction Model (VECM)
framework. Based on the results of Johansen Co-integration test, it confirms
that there is statistically significant long-run equilibrium relationship
between exports, imports and economic growth. The results of the VECM Granger
Causality test assure that the disequilibrium in long-run GDP growth rate is
corrected or adjusted by 24% in short-run following the next year. Furthermore,
the study found short-run causality running from exports to economic growth and
from economic growth to imports. Finally, findings of the study will help the
policy makers and development partners of Bangladesh to rethink about the
current policies regarding the exports, imports, inflation, gross capital
formation (investment) and economic growth.