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A Macro-Econometric Model of Bangladesh

M. Ali Rashid

 

Abstract

A short-run macro-econometric model for Bangladesh has been developed in this paper combining the elements of both demand-based and supply-bottleneck models. The parameter estimates have been derived using data for the period 1960-1979 (excluding 1971). Tests of significance of the estimated co-efficients seem to validate the model. Historical simulation also revealed that the model is capable of broadly explaining the workings of the Bangladesh economy. Since no policy simulation was carried out, no definitive conclusions can be reached at this stage about the policy implications of the model. Nevertheless, some tentative conclusions have been drawn on the basis of the signs and magnitudes of estimated co-efficients.

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