Anisul M. Islam

Foreign aid and economic growth: an econometric study of bangladesh

Bangladesh is one of the poorest countries in the world. Since independence in 1971, Bangladesh has received a large inflow of foreign capital from various countries for rapid economic progress. Bangladesh thus provides a test case for examining the effectiveness of foreign capital in promoting economic growth. Focussing on the supply side of the economy, an econometric model is developed to quantify the effects of foreign aid and its various components on economic growth. The model is tested using available time series data on Bangladesh from 1972 to 1988. Keeping data limitations, measurement problems and other econometric problems in mind, the empirical results indicate the domestic resources exert a stronger impact on growth than foreign resources. Foreign resources, in its highly aggregative form, do not show any significant contribution to growth. However, its decomposition into various components show that loans are more effective than grants and food aid is more effective than commodity or period ...

Wagner's law revisited: cointegration and exogeneity tests for the USA

This paper re-examines Wagners hypothesis of an expanding government sector with progress of the economy using advanced econometric techniques such as cointegration and exogeneity tests not used in previous empirical studies. This study also uses much longer time series data for the USA than previously utilized. The empirical results based on cointegration and exogeneity tests provide strong support for the hypothesis for the USA.

Time-varying volatility and equity returns in Bangladesh stock market

This article empirically examines the time-varying risk return relationship and the impact of institutional factors such as circuit breaker on volatility for the emerging equity market of Bangladesh [namely The Dhaka Stock Exchange (DSE)] using daily and weekly stock returns. The DSE equity returns show negative skewness, excess kurtosis and deviation from normality. The returns display significant serial correlation suggesting stock market inefficiency. The results also show a significant relationship between conditional volatility and stock returns, but the risk-return parameter is found to be sensitive to choice of samples and frequencies of data. Overall, the coefficient of the risk-return parameter is negative and statistically significant. While this result is not consistent with the portfolio theory, it is possible theoretically in emerging markets as investors may not demand higher risk premia if they are better able to bear risk at times of particular volatility (Glosten et al., 1993). While lock-in did not have any overall impact on stock volatility, the imposition of a circuit breaker has contributed significantly to the volatility of realized returns. As a policy to improve the operation of capital market timely disclosure and dissemination of information to the shareholders and investors on the performance of listed companies should be emphasized.

Growth and Employment Empirics of Bangladesh

This paper applies multivariate cointegration methodology and vector error-correction models to investigate the factors that are likely to contribute to economic growth and employment in Bangladesh. This paper concludes that exports, FDI and external remittances enhance both economic growth and employment in the short run. But the exchange rate depreciation seems contractionary, although the empirical evidence lacks abundance of clarity and robustness.

An econometric estimation of the aggregate import demand function for Bangladesh: some further results

This study empirically estimates some critical parameters of the aggregate import demand function for Bangladesh for Bangladesh using quarterly time series data and by applying the Johansen–Juselius multivariate cointegration technique. Cointegration results indicate that the import demand function is dominated by income and relative prices. The income elasticity is significantly positive and exceeds unity indicating that aggregate imports are to be considered as ‘luxury’ goods. The effect of the relative price variable is significantly negative but its elasticity coefficient is less than unity.

Asymmetries in the Thai lending-deposit rate spread: an econometric analysis

This study examines the asymmetric behaviour of lending–deposit rate spread in the emerging Thai economy over the period 1991:1 to 2007:1. Although both the threshold autoregressive model and the Momentum Threshold Autoregressive (MTAR) model detect asymmetries, the MTAR model is a better fit for the sample data. The finding that Thai banks exhibit faster adjustment in lending rates when the spread is widening (i.e. falling deposit rates) than when the spread is narrowing (i.e. rising deposit rates) supports the consumer reaction hypothesis of Stiglitz and Weiss. This phenomenon is the result of the ‘oligopsonistic’ relationship between the banks and their powerful corporate customers, and the attendant practice of the ‘name’-based lending.

Foreign Assistance and Development in Bangladesh

With a large population (about 120 million) living in a small land area (55,000 sq. miles) and with a low annual per capita income (about U.S.

An Empirical Test of the Demand for International Reserves

250), Bangladesh is classified as one of the poorest countries in the world. Because of its precarious economic condition, various donor countries and agencies have provided the country with substantial amounts of public foreign assistance. Since its independence in 1971 to the year 1992, Bangladesh has received a cumulative sum of 24 billion dollars in foreign aid (grants and loans) from all donor countries and agencies combined (ERD 1993). In 1992 alone, it received a sum of

Public versus private investment in economic growth of Bangladesh: an econometric analysis

1,611 million in foreign aid (ERD 1992) which constitutes about

Agribusiness potentials for Bangladesh an analysis

14 per capita and about 7 percent of its 1992 GDP. More importantly, foreign aid constitutes an extremely high proportion (about 90 percent) of the country’s development budget.