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Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach

Published in Economics (Volume 11, Issue 4)
Received: 29 September 2022     Accepted: 12 November 2022     Published: 25 December 2022
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Abstract

Growth, sustainability and strength of an economy reflected through the variables which measure the macroeconomic performances e.g. output, unemployment rate, stability of price, balance of export and import and exchange rate stability. All of that stability of price which is pronounced in field of economics by inflation is more complicated and a fragile variable, measures the overall strength and welfare of an economy. Interactive augmentation among the variables is needed to be identified and defined for the policy making purpose which is comprehensive and pre-requisite to implement and design the policy prescriptions. In this paper we investigate the macroeconomic variables which determined the inflation of Bangladesh by using time series data from year 1981 to 2020. Using Autoregressive Distributed Lag (ARDL) model with bound test approach, it is found that gross domestic product (gdp), broad money supply (m2), export growth (xg), import growth (mg) and growth of population (pg) are the major determinants of inflation (inf) in Bangladesh. Though the interaction of those variables is different on inflation but there long-run and short-run penetrations are statistically impactful.

Published in Economics (Volume 11, Issue 4)
DOI 10.11648/j.eco.20221104.14
Page(s) 200-210
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Inflation, GDP, Export, Import, Money Supply, ARDL Bound Test

References
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Cite This Article
  • APA Style

    Rejoana Islam, Refat Ferdous, Nahida Sultana, Marzia Nomi. (2022). Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach. Economics, 11(4), 200-210. https://doi.org/10.11648/j.eco.20221104.14

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    ACS Style

    Rejoana Islam; Refat Ferdous; Nahida Sultana; Marzia Nomi. Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach. Economics. 2022, 11(4), 200-210. doi: 10.11648/j.eco.20221104.14

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    AMA Style

    Rejoana Islam, Refat Ferdous, Nahida Sultana, Marzia Nomi. Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach. Economics. 2022;11(4):200-210. doi: 10.11648/j.eco.20221104.14

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  • @article{10.11648/j.eco.20221104.14,
      author = {Rejoana Islam and Refat Ferdous and Nahida Sultana and Marzia Nomi},
      title = {Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach},
      journal = {Economics},
      volume = {11},
      number = {4},
      pages = {200-210},
      doi = {10.11648/j.eco.20221104.14},
      url = {https://doi.org/10.11648/j.eco.20221104.14},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20221104.14},
      abstract = {Growth, sustainability and strength of an economy reflected through the variables which measure the macroeconomic performances e.g. output, unemployment rate, stability of price, balance of export and import and exchange rate stability. All of that stability of price which is pronounced in field of economics by inflation is more complicated and a fragile variable, measures the overall strength and welfare of an economy. Interactive augmentation among the variables is needed to be identified and defined for the policy making purpose which is comprehensive and pre-requisite to implement and design the policy prescriptions. In this paper we investigate the macroeconomic variables which determined the inflation of Bangladesh by using time series data from year 1981 to 2020. Using Autoregressive Distributed Lag (ARDL) model with bound test approach, it is found that gross domestic product (gdp), broad money supply (m2), export growth (xg), import growth (mg) and growth of population (pg) are the major determinants of inflation (inf) in Bangladesh. Though the interaction of those variables is different on inflation but there long-run and short-run penetrations are statistically impactful.},
     year = {2022}
    }
    

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  • TY  - JOUR
    T1  - Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach
    AU  - Rejoana Islam
    AU  - Refat Ferdous
    AU  - Nahida Sultana
    AU  - Marzia Nomi
    Y1  - 2022/12/25
    PY  - 2022
    N1  - https://doi.org/10.11648/j.eco.20221104.14
    DO  - 10.11648/j.eco.20221104.14
    T2  - Economics
    JF  - Economics
    JO  - Economics
    SP  - 200
    EP  - 210
    PB  - Science Publishing Group
    SN  - 2376-6603
    UR  - https://doi.org/10.11648/j.eco.20221104.14
    AB  - Growth, sustainability and strength of an economy reflected through the variables which measure the macroeconomic performances e.g. output, unemployment rate, stability of price, balance of export and import and exchange rate stability. All of that stability of price which is pronounced in field of economics by inflation is more complicated and a fragile variable, measures the overall strength and welfare of an economy. Interactive augmentation among the variables is needed to be identified and defined for the policy making purpose which is comprehensive and pre-requisite to implement and design the policy prescriptions. In this paper we investigate the macroeconomic variables which determined the inflation of Bangladesh by using time series data from year 1981 to 2020. Using Autoregressive Distributed Lag (ARDL) model with bound test approach, it is found that gross domestic product (gdp), broad money supply (m2), export growth (xg), import growth (mg) and growth of population (pg) are the major determinants of inflation (inf) in Bangladesh. Though the interaction of those variables is different on inflation but there long-run and short-run penetrations are statistically impactful.
    VL  - 11
    IS  - 4
    ER  - 

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Author Information
  • Department of Economics, University of Barishal, Barishal, Bangladesh

  • Department of Economics, University of Barishal, Barishal, Bangladesh

  • Department of Economics, University of Barishal, Barishal, Bangladesh

  • Department of Economics, University of Barishal, Barishal, Bangladesh

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