Rao, B. Bhaskara and Hassan, Gazi (2009): How to Increase the Long Run Growth Rate of Bangladesh?
Download (257Kb) | Preview
This paper develops a framework to analyse the determinants of the long term growth rate of Bangladesh. It is based on the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and follows Senhadji’s (2000) growth accounting procedure to estimate total factor productivity (TFP). Our growth accounting exercise showed that growth rate in Bangladesh, until 1990, was due to factor accumulation. Since then, however, TFP made a small positive contribution to growth. An analysis of the determinants of TFP showed that remittances by emigrant workers have negative effects which seem to be due to the loss of skilled labour force. Using these results policy options, to double per capita income of Bangladesh in about 15 years, are discussed.
|Item Type:||MPRA Paper|
|Original Title:||How to Increase the Long Run Growth Rate of Bangladesh?|
|Keywords:||Solow Growth Model, Endogenous Growth, Total Factor Productivity, Growth Accounting, Remittances, Bangladesh|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O30 - General
A - General Economics and Teaching > A1 - General Economics > A10 - General
|Depositing User:||B. Bhaskara Rao|
|Date Deposited:||04. Apr 2009 18:04|
|Last Modified:||13. Feb 2013 07:05|
Barro, R., 1990. Government spending in a simple model of endogenous growth. Journal of Political Economy 98 (5), S103-S125.
Baumol, W. J, 1986. Productivity growth, convergence, and welfare: what the long-run data show. American Economic Review, 76(5), 1072-85.
Durlauf, S., Johnson, P., Temple, J., 2005. Growth econometrics. Aghion, P. and Durlauf, S. (eds.) Handbook of Economic Growth Volume 1 Chapter 8, 555-677.
Easterly, W, Levine, R., Roodman, D., 2004. New data, new doubts: revisiting aid policies and growth. Centre for Global Development Working Paper No: 26.
Hendry, D., 2000. Econometrics techniques: general discussion. Backhouse R. and Salanti A. (eds.) Macroeconomics and the Real World, Oxford University Press.: Oxford, 239-242.
Hendry, D., Krolzig, H., 2005 The properties of automatic GETS modelling. Economic Journal, 115(502), C32-C61.
Hicks, J., 1965. Capital and Growth. Oxford University Press: Oxford.
Lucas, R., 1988. On the mechanics of economic development. Journal of Monetary Economics 22(1), 3-42
Mankiw, N. G., Romer, D., Weil., D., 1992. A contribution to the empirics of economic growth. Quarterly Journal of Economics 107(2), 407-437.
Phillips, P., Hansen, B., 1990. Statistical inference in instrumental variables regression with I(1) processes. Review of Economic Studies, 57(1), 99-125.
Pritchett, L., 2006. The Quest Continues. Finance and Development 43(1)
Rao, B. B., Cooray, A., 2008. Growth literature and policies for the developing countries. MPRA Paper 10951, University Library of Munich, Germany
Rao, B. B., Singh, R., Kumar, S., 2009. Do we need time series econometrics? Applied Economics Letters
Romer, P. 1986. Increasing returns and long run growth. Journal of Political Economy 94: 1002-1037
Romer, P., 1990. Endogenous technological change. Journal of Political Economy 98, S71-S102
Sato, R., 1963. Fiscal policy in a neo-classical growth model: an analysis of time required for equilibrium adjustment. Review of Economic Studies 30: 16-23
Senhadji, A., 2000. Sources of economic growth: an extensive growth accounting exercise. IMF Staff Papers 47: 129-157
Solow, R., 1956. A contribution to the theory of economic growth. Quarterly Journal of Economics 70: 65-94
Uzawa, H., 1968. Market allocation and optimum growth. Australian Economic Papers 17, 17-27