Exploring the Impact of Inflation on Economic Development in Bangladesh
Author (s)
Md. Sayebur Rahman
Abstract
A moderate and stable inflation rate helps a country’s development and hence economic growth. A modest degree of inflation supplements savers’ returns, boosts investment, and thereby promotes a country’s economic growth. This article empirically investigates the current link between inflation and economic development in Bangladesh, utilizing data on GDP growth and GDPD as a proxy for inflation from 1960 to 2018. The Granger Causality Test, unit root test, Co-integration, and VECM were used to evaluate empirical data. According to the empirical data, there is a statistically substantial long-run negative association between GDPD and GDP, demonstrating an adverse correlation between inflation and economic development. Again, data showed that there is long-run positive causation between GDP and GDPD. Furthermore, the threshold level of inflation has a beneficial outcome on economic growth, but inflation has a detrimental influence on economic growth if it reaches the threshold level. The key policy implications of the empirical findings are summarized in this study.
Keywords: Country’s development, Inflation, Economic Growth, Cointegration, VECM, Granger Causality.
| Title: | Exploring the Impact of Inflation on Economic Development in Bangladesh |
|---|---|
| Author: | Md. Sayebur Rahman |
| Journal Name: | International Journal of Science and Business |
| Website: | ijsab.com |
| ISSN: | ISSN 2520-4750 (Online), ISSN 2521-3040 (Print) |
| DOI: | https://doi.org/10.5281/zenodo.7583666 |
| Media: | Online |
| Volume: | 19 |
| Issue: | 1 |
| Issue publication (Year): | 2023 |
| Acceptance Date: | 27/01/2023 |
| Date of Publication: | 30/01/2023 |
| PDF URL: | https://ijsab.com/wp-content/uploads/2046.pdf |
| Free download: | Available |
| Page: | 87-96 |
| First Page: | 87 |
| Last Page: | 96 |
| Paper Type: | Research paper |
| Current Status: | Published |
Cite This Article:
Md. Sayebur Rahman (2023). Exploring the Impact of Inflation on Economic Development in Bangladesh. International Journal of Science and Business, 19(1), 87-96. doi: https://doi.org/ 10.5281/zenodo.7583666
Retrieved from https://ijsab.com/wp-content/uploads/2046.pdf
About Author (s)
Md. Sayebur Rahman, Department of Finance and Banking, Begum Rokeya University, Rangpur.
DOI: https://doi.org/10.5281/zenodo.7583666