Causal Nexus among Export, Eternal Debt and Economic Growth: The Case of Bangladesh

Sakib Bin Amin and Lamia Lazmi Khandker

Researchers have always been concerned about the key determinates of economic growth. However, to the best of our knowledge, very little attention has been paid to empirically examine the relationship between economic growth, exports and external debt servicing in Bangladesh economy. This paper tries to investigate the impact of export and external debt on the economic growth of Bangladesh. The annual data series over the period 1980-2014 has been used in this paper. The authors performed the Augmented Dickey Fuller (ADF) test to check if the variables are stationary, either at their level or at first differences. The study used the ARDL (Auto- Regressive Distributive Lag model) model to check if export and external debt are co-integrated with economic growth of Bangladesh. According to the findings, export and external debt, both are co-integrated with Economic Growth for lag 2, 3 and 4. Finally, authors applied the Granger causality test and results revealed that export and economic growth has strong affects each other- both in short run and long run. However, impact of External Debt on Economic Growth prevails only in long run; no short run causality was found. Moreover

DOI : https://doi.org/10.21102/graf.2017.09.82.07