Determinants of Current Account Deficit in Developing Countries: The Case of Bangladesh

QSpace/Manakin Repository

Determinants of Current Account Deficit in Developing Countries: The Case of Bangladesh

Show full item record


Title: Determinants of Current Account Deficit in Developing Countries: The Case of Bangladesh
Author: Kamrul Hassanm A. F. M.
Abstract: Co-integration and Error Correction Model (ECM) are employed to study the behavior of Current Account Deficit (CAD) of Bangladesh and its determinants. The determinants of CAD include budget surplus, domestic saving, domestic income growth, foreign income growth, foreign interest rate, terms of trade, export and real exchange rate. A long-run equilibrium (co-integration) relationship is found between CAD and its determinants, although some variables are non-stationary. Out of eight independent variables only three of them namely, terms of trade, export and foreign interest rate, are found to have significant impact on CAD both in the long and short run. ECM formulation of the CAD model shows that more than 72% discrepancy between actual and long-run value of CAD is corrected in each year. The important implication of the study is that domestic economic policy has little to do with correcting CAD as all significant factors are related to the external economic conditions.
URI: http://hdl.handle.net/10576/6856
Date: 2006

Files in this item

Files Size Format View
abstract.pdf 2.117Kb PDF View/Open
abstract.doc 20.5Kb Microsoft Word View/Open
13061201-0001-fulltext.pdf 287.9Kb PDF View/Open

This item appears in the following Collection(s)

Show full item record

Search QSpace


Advanced Search

Browse

My Account