No abstract

No abstract

No abstract

PurposeThe study aims to empirically examine the relationship between monetary policy and economic growth, as well as to explore the long-run and the short-run effect of monetary policy on the economic growth of a developing country (Bangladesh) and a developed country (the United Kingdom).Design/methodology/approachDepending on data availability, the study employed secondary data covering the period of 1980–2019. The augmented Dickey–Fuller test and the Phillips–Perron test were used for the stationarity test. Further, the F-bounds test was run to justify the long-run relationship between monetary policy and economic growth. Thereafter, long-run coefficients were revealed from the auto-regressive distributed lag (ARDL) model and short-run coefficients from the error correction model. Furthermore, the vector error correction model (VECM) Granger causality approach was employed to demonstrate the causality of studied variables. Lastly, different diagnostics tests ensured the robustness of the models.FindingsF-bounds test outcomes suggest that monetary policy has a long-run relationship with economic growth in both countries. Long-run coefficients revealed that money supply has a positive long-run impact on economic growth in both countries. Unlike the UK, the exchange rate exhibits an adverse effect on the economic growth of Bangladesh. The bank rate seems to promote economic growth for the UK. Findings also depict that increase in lending interest rates hurts the economic growth for both countries. Besides, the short-run coefficients portray random effects at different lags in both cases. Lastly, causality among studied variables is revealed using the VECM Granger causality approach.Originality/valueThe novelty of this study lies in consideration of both developing and developed countries in the same study.

Tea export competitiveness and the nexus between tea export and economic growth: The cases of Bangladesh, India and Sri Lanka Long since the end of the British India regime, Bangladesh, India, and Sri Lanka have produced a signifi cant volume of tea which continues to bring them invaluable foreign currency earnings through exports. Our paper explores the tea export competitiveness of these countries by employing the Revealed Symmetric Comparative Advantage (RSCA) index, and analyses the nexus between tea export and economic growth over the period from 1980 to 2018 using several dynamic econometric approaches. Results suggest that Bangladesh has lost its tea export competitiveness over the last decade. India posted moderate performance, while Sri Lanka consistently kept its dominant position. Further, the Johansen Cointegration test outcomes report no long-run relationship between tea export and economic growth across all the countries. The Granger Causality outcomes illustrate that only in Sri Lanka is it the case that tea export causes short-run economic growth. Lastly, the impulse response function projects tea export and economic growth, taking into consideration the response of each to a shock from the other. Extrapolation from the results indicate that, in contrast to the cases of Bangladesh and India (where no direct relationship was found), tea export and economic growth are intimately interconnected in Sri Lanka. This article further recommends eff ective policies so that economic growth in these countries can remain steady and that their tea industries can thrive.