Finding Causality Between Finance and Growth in Bangladesh

Author(s)	Arunava Kumar Choudhury, Subrata Saha
Country	India
Abstract	The relationship between financial development and economic growth has gained much attention in the last three decades. It has been primarily believed that financial sector development promotes economic growth. A lot of theoretical and empirical research has been done in this field and the results which came out are a kind of mixed relationship between the two. Bangladesh, a country in the SAARC region has taken different financial reform policies in the same line with other developed and developing countries. The main purpose of this paper is to investigate the relationship between financial development and economic growth in Bangladesh. Annual time series data for the period 1976 to 2020 has been taken and the ARDL technique has been used for this purpose. The ARDL bound testing shows that there is a long-run relationship between financial development variables and economic growth. In the short run, all the proxies of financial development were found to have a significant relation to economic growth. The study has found two bidirectional causality and one unidirectional causality between the variables.
Keywords	Financial development, economic growth, ARDL, causality
Field	Sociology > Economics
Published In	Volume 5, Issue 6, November-December 2023
Published On	2023-12-23
DOI	https://doi.org/10.36948/ijfmr.2023.v05i06.10820

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