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

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contributor.author Kamrul Hassanm A. F. M. en_US
date.accessioned 2009-11-25T12:41:38Z en_US
date.available 2009-11-25T12:41:38Z en_US
date.issued 2006 en_US
identifier.citation Studies of Business and Economics, 2006, Vol. 12, No. 1, Pages 5-24. en_US
identifier.uri http://hdl.handle.net/10576/6856 en_US
description.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. en_US
language.iso en en_US
publisher Qatar University en_US
subject Developing Country en_US
title Determinants of Current Account Deficit in Developing Countries: The Case of Bangladesh en_US
type Article en_US
identifier.pagination 5-24 en_US
identifier.issue 1 en_US
identifier.volume 12 en_US


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