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Exploring the nexus between remittances and economic growth: a study of Bangladesh
International Review of Economics (2014)
  • Ronald R Kumar
  • Peter J Stauvermann
Abstract
In this article, we explore the much debated nexus between remittances and economic growth in Bangladesh. Drawing on an annual data from 1979 to 2012 and using the augmented Solow framework with the autoregressive distributed lag bounds procedure, we examine the cointegration relationship, the short-run and long-run effects and the causality nexus between remittances per worker, capital per worker and the output per worker. The results show that remittances have a mixed effect in the short-run, however, a momentous positive effect in the long-run (0.11 %), on the output per worker. From the Granger causality assessment, we find inter alia, a bidirectional causality between remittances and output (in per worker terms) and a unidirectional causation from capital to remittances (in per worker terms). Our results therefore support remittance led growth hypothesis in Bangladesh.
Keywords
  • Remittances,
  • ARDL approach,
  • Granger causality,
  • Bangladesh
Publication Date
March, 2014
Citation Information
Ronald R Kumar and Peter J Stauvermann. "Exploring the nexus between remittances and economic growth: a study of Bangladesh" International Review of Economics (2014)
Available at: http://works.bepress.com/ronald_ravinesh_kumar/36/