ISSN: IJSB: 2520-4750 (Online), 2521-3040 (Print) JSR : 2708-7085 (online)

Exploring the Impact of Inflation on Economic Development in Bangladesh

 Author (s)

Md. Sayebur Rahman


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.

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Title: Exploring the Impact of Inflation on Economic Development in Bangladesh
Author: Md. Sayebur Rahman
Journal Name: International Journal of Science and Business
ISSN: ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
Media: Online
Volume: 19
Issue: 1
Issue publication (Year): 2023
Acceptance Date: 27/01/2023
Date of Publication: 30/01/2023
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: 10.5281/zenodo.7583666

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About Author (s)

Md. Sayebur Rahman, Department of Finance and Banking, Begum Rokeya University, Rangpur.



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