The Impact of key Macroeconomic factors on Economic Growth of Bangladesh: a VAR Co-integration Analysis

Ali, Md. Arphan; Saifullah, Md. Khaled; Kari, Fatimah

doi:10.17722/ijme.v6i1.218

Cited by 3 publications

(8 citation statements)

References 14 publications

(14 reference statements)

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“…Hence, this study relies on both the endogenous and exogenous growth theories. Different studies such as (Kryeziu, 2016;Ali et al, 2015;Antwi et al, 2013;Iqbal and Zahid, 1998;Suliman and Osman, 1994;Grossman and Helpman, 1994) have shown that economic growth relates to macroeconomic variables. Although economic growth is, a complex macroeconomic phenomenon given the fact that it is still difficult to distinguish which of the determinant that has greater or less impact on growth (Kryeziu, 2016).…”

Section: Economic Growth Theoriesmentioning

confidence: 99%

“…In Pakistan, high inflation rate, increasing foreign debt, low level of physical and human capital is mainly the source of unstable economic growth inherent in the economy. More so, macroeconomic stability in any nation leads to economic growth as every nation aspires for a sustainable economic growth, which measures the entire economic development of a country and brings about good standard of living in an economy (Ali et al, 2015;Suliman and Osman, 1994).…”

Section: Economic Growth Theoriesmentioning

confidence: 99%

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The Ordeal of a Petrostate Amidst Declining Oil Revenue and Implications on Budgetary Objectives: An ARDL Bound Test Approach for Angola

2021

JESD

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The combination of the quest for renewable energy for global decarbonisation and the decrease in economic activities across the world due to the COVID-19 pandemic has brought about the incessant plunge in the oil prices leading to a sharp decline in oil revenues of most of the oil-exporting countries. Hence, deterioration in trade, a decrease in economic growth, and inability to meet the nation's fiscal needs. This study analyses declining oil revenue implications on the budgetary objectives of the oil-exporting countries-the case of a petrostate, Angola, which is the second-largest oil exporter in sub-Sahara Africa. The Autoregressive Distributed Lag (ARDL) Bound Test Approach is used to estimate the model's parameters. Yearly time series data for 39 years were employed for the empirical analyses. The unit root tests were first carried out using the Augmented Dickey-Fuller (ADF) and Philips Peron's (PP) Tests. The Unit Root results indicate that all the variables are stationary at level I(0) and at first difference I(1). This outcome was the basis for the choice of the ARDL estimation technique for the analyses. Primary data were also used to supplement the secondary data analysis. The results show that Angola's government revenue decreased significantly as oil price declines, which indicate that Angola is overwhelmingly relying on oil exports for its sustainability. Contrary to expectation, the results reveal that a percentage decline in oil price exerts a positive and substantial impact on the Angolan economy's government expenditures, financed mainly through borrowing and seigniorage. It is highly recommended that Angola diversifies their revenue base, develop other mineral resources in the economy aside oil and ensure effective management of government funds. However, an economic model is proposed to close the revenue gap in this highly oil-dependent nation.

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Section: Economic Growth Theoriesmentioning

confidence: 99%

Section: Economic Growth Theoriesmentioning

confidence: 99%

The Ordeal of a Petrostate Amidst Declining Oil Revenue and Implications on Budgetary Objectives: An ARDL Bound Test Approach for Angola

2021

JESD

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“…The prime objective of this research is to determine the effect of macro-economic factors on the economic growth of Bangladesh. Literature review indicates that local and international researchers, together with Akram et al (2011), Enu et al (2013), Biswas and Saha (2014), Ismaila and Imoughele (2015), Ali et al (2015), Wadud (2017), Kotesware and Sera (2017), Simionescu et al (2017), Anik and Biplob (2019), Haque (2020), Oyebowale and Algarhi (2020), Ghimire et al, (2020), Jannat et al (2020), Jacob et al (2021), Mukit (2021), Hassan et al (2022), Ajmair and Tahir, (2022) and many other studies carried out extensive study to express the effect of macroeconomic indicators on various economies. Although all of the abovementioned research scholars use GDP as a substitute for economic growth, their independent variables and research findings vary greatly from economy to economy and researcher to researcher.…”

Section: Introductionmentioning

confidence: 99%

“…Although all of the abovementioned research scholars use GDP as a substitute for economic growth, their independent variables and research findings vary greatly from economy to economy and researcher to researcher. Among various macroeconomic indicators, inflation shows a positive relationship (Enu et al, 2013;Ali et al, 2015, Jacob et al, 2021Haque, 2020;Mukit, 2021) negative relationship (Akram et al, 2011;Biswas & Saha, 2014;Tien, 2021, Hassan et al, 2022Ajmair & Tahir, 2022) and insignificant relationship (Ghimire et al, 2020, Wadud, 2017Adu-Gyamfi et al, 2020) with economic growth. Moreover, export has a positive relationship (Biswas & Saha, 2014;Hassan et al, 2022;Oyebowale & Algarhi, 2020) as well as a negative relationship (Jannat et al, 2020) and an insignificant relationship (Wadud, 2017;Haque, 2020;Mukit, 2021) with economic growth.…”

Section: Introductionmentioning

confidence: 99%

Effect of Macroeconomic Factors on Economic Growth: A Case Study of Bangladesh

Deb Nath,

Ambia Begum,

Abdul Maleque

2024

J. Asian Dev. Studies

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Macroeconomic factors strongly influence the economy. It affects countries and businesses equally. The relationship between different macroeconomic factors is an area of widespread study for policymakers and economists. The ultimate purpose of this study is to assess the impact of macroeconomic factors on the economic growth. This research has taken GDP as a substitute variable for the development of the economy as well as endogenous (dependent) variable and FDI, inflation (INF), money supply (M2), public and private domestic investment (DINVEST), and foreign exchange reserve (FExR) as independent variables. Moreover, this study used time series secondary data starting from 2005-06 to 2022-23 for all econometric analysis. On the other side, we utilized the ADF (Augmented Dickey-Fuller) test to study the unit root (stationary property) of data, the Durbin Watson (DW) statistic technique to verify the autocorrelation of variables, the VIF test technique to examine the multicollinearity among independent variables and multiple linear regression to scrutinize the overall effect of macroeconomic factors on growth of the economy. Study findings show that DINVEST and FDI positively affect the growth of the economy. i.e., if macroeconomic variables- DINVEST and FDI are increased by 1 unit, they increase economic growth by 2.96 units and 0.62 units, respectively. However, inflation, money supply, and foreign exchange reserves have a positive effect on economic growth, but it is statistically insignificant. The study implies that economists, researchers, academicians, and policymakers can use the findings of the study for future research and decision-making regarding the effect of macroeconomic factors on economic growth.

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“…Similarly, Roespinoedji, et al, (2019); Nkoro and Uko (2016); Magoti and Mtui, (2020) employed the use of ARDL in analysing the secondary data inherent in their studies. Taghizadeh- Hesary and Yoshino (2015); Akpan and Atan, (2015) used the SVAR, while Farzanegan (2011) and Ali et al, (2015) used VAR in carrying out their analyses, with secondary data in the oil related studies. To the best of my knowledge, there is no other oil related study either for oil-importing, oil-exporting, developed or for developing nations and even for emerging economies carried out survey data analysis.…”

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confidence: 99%

A Comparative Survey Data Analysis of Declining Oil Revenue Implications on the Economic Performance of Oil-Exporting Countries: Nigeria, Venezuela and Norway

2021

JRDM

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The global oil markets have witnessed different episodes of oil price fluctuations at different intervals. The effect of the fluctuations differs across nations and partly depending on the direction of the shocks. Declining oil revenue also has both direct and indirect impact on the economic performance of the countries where the heavy dependency on crude oil prevails. This study is a comparative survey analysis of declining oil revenue implications on the economic performance of oil-exporting countries; the case of highly oil-dependent nations: Nigeria (West Africa), Venezuela (South America) and Norway (Europe). Purposive sampling was used in selecting our samples, while the Survey Monkey cloud-based tool was employed to administer and collect the questionnaires from the targeted audience. Survey data analysis was carried out using SPSS Version 25 and the Survey Monkey platform. The results reveal that both increasing and decreasing oil price affect the oil revenues and the external reserves of Nigeria, Venezuela and Norway proportionately. The outcome also shows that during periods of declining oil revenues, Nigeria and Venezuela attain their budgetary needs through borrowing and seigniorage. On the other hand, Norway utilises its savings with the Sovereign Wealth Fund (SWF) and Pension Funds in financing its fiscal needs, thereby exonerating Norway from the resource curse syndrome. It is recommended that these nations explore other sources of revenue through diversification and the development of other natural resources. Nigeria and Venezuela should also restore security which would help in attracting further foreign investors. They should also ensure effective management of government funds and pay attention to its human capital development. However, an economic model is proposed to aid in closing the revenue gaps in these highly oil-dependent nations, given that the "power of oil" is gradually fizzling out as other alternative forms of energy that are assumed to be environmentally friendly are widely embraced.

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The Impact of key Macroeconomic factors on Economic Growth of Bangladesh: a VAR Co-integration Analysis

Abstract: Abstract-This study analyzes the impact of key macroeconomic factors on economic growth of

Cited by 3 publications

References 14 publications

The Ordeal of a Petrostate Amidst Declining Oil Revenue and Implications on Budgetary Objectives: An ARDL Bound Test Approach for Angola

The Ordeal of a Petrostate Amidst Declining Oil Revenue and Implications on Budgetary Objectives: An ARDL Bound Test Approach for Angola

Effect of Macroeconomic Factors on Economic Growth: A Case Study of Bangladesh

A Comparative Survey Data Analysis of Declining Oil Revenue Implications on the Economic Performance of Oil-Exporting Countries: Nigeria, Venezuela and Norway

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