Financial Development and Output: A Synthesis of Time Series Cointegration and Causality Tests for Bangladesh

IF 0.6 Q4 ECONOMICS

South Asian Journal of Macroeconomics and Public Finance Pub Date : 2016-12-01 DOI:10.1177/2277978716670788

A. Das, Syeed Khan

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引用次数: 2

Abstract

Since the 1980s, financial liberalization in developing countries has been an important policy prescription of many international organizations including the World Bank (WB) and International Monetary Fund (IMF). It is argued that the liberalization of the financial sector would allocate productive resources in the most efficient way and increase economic growth. However, the relationship between financial liberalization and output is not clear in the existing empirical literature. Applying the cointegration and Granger causality tests within the vector error correction model (VECM) to a data set from 1974 to 2013, our results suggest that output per capita Granger causes financial development, and vice versa. Hence, we find the evidence of bidirectional causality between financial development and GDP in Bangladesh. These results will help policymakers design financial policies in Bangladesh and other developing countries, which face the dilemma of financial liberalization while maintaining a high and stable output growth. JEL Classification: E44, O40, C22

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金融发展与产出:孟加拉国时间序列协整和因果检验的综合

自20世纪80年代以来，发展中国家的金融自由化一直是包括世界银行(WB)和国际货币基金组织(IMF)在内的许多国际组织的重要政策处方。有人认为，金融部门的自由化将以最有效的方式分配生产资源，并促进经济增长。然而，在现有的实证文献中，金融自由化与产出之间的关系并不清楚。利用向量误差修正模型(VECM)中的协整检验和格兰杰因果检验对1974 - 2013年的数据集进行检验，我们的结果表明人均产出格兰杰导致金融发展，反之亦然。因此，我们发现了孟加拉国金融发展与GDP之间存在双向因果关系的证据。这些结果将有助于孟加拉国和其他发展中国家的政策制定者设计金融政策，这些国家面临着金融自由化的困境，同时保持高而稳定的产出增长。JEL分类:E44, O40, C22

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来源期刊

South Asian Journal of Macroeconomics and Public Finance ECONOMICS-

CiteScore

2.10

自引率

11.10%

发文量

期刊介绍： The purpose of the Journal is to publish (in English language) peer-reviewed articles, reviews and scholarly comments on issues relating to contemporary global macroeconomics and public finance by which is understood: The Journal is for all professionals concerned with contemporary Macroeconomics and Public Finance and is a forum for all views on related subjects. The Editorial Board welcomes articles of current interest on research and application on the areas mentioned above. The Journal will be international in the sense that it seeks research papers from authors with an international reputation and articles that are of interest to an international audience. In pursuit of the above, the journal shall: a. draw on and include high quality work from the international community of scholars including those in the major countries of Asia, Europe, Asia Pacific, the United States, other parts of the Americas and elsewhere with due representation for considerations of the readership. The Journal shall include work representing the major areas of interest in contemporary research on Macroeconomics and Public Finance and on a wide range of issues covering macro- economics, tax and fiscal issues, banking and finance, international trade, labour economics, computational and mathematical methods, etc. The Journal would particularly engage papers on pure and applied economic theory and econometric methods. b. avoid bias in favour of the interests of particular schools or directions of research or particular political or narrow disciplinary objectives to the exclusion of others. c. ensure that articles are written in a terminology and style which makes them intelligible, not merely within the context of a particular discipline or abstract mode, but across the domain of relevant disciplines.