This paper specifies and estimates a short run money demand model for Bangladesh for the period 1974:1-1985:4. After both formal and informal tests of model selection, the Laidler short run real money demand model has been found to be appropriate. Mckinnon, White and Davidson’s (1983) non-nested test of model selection suggests that neither the long-linear nor the linear functional form has any superiority over the other for Bangladesh. Real permanent income and the expected rate of inflation have been found to be the important variables, both theoretically and statistically, in the money demand function. The long run permanent income elasticity of the demand for money has been found to exceed unity. In the case of Bangladesh, the empirical results show that both the demand for narrow and broad money are stable functions.

The extent of son preference and its effect on desire for additional children and contraceptive use is examined for rural Bangladesh. Our results show that there is strong son preference, expressed through contraceptive behaviour and desire for additional children, on the part of rural Bangladeshi women. In deciding whether or not to have an additional birth or the use contraception, sex composition of children and number of sons are the most important determinants. Most couples are guided in their desire for additional children by an ideal sex composition which is commonly found to comprise two to three sons and one daughter. Bangladeshi women want to have children of both sexes but their preference for sons is much stronger and the number much larger compared to those for daughters. It can be argued from our findings that if the desired number of sons and daughters have already been born, women will be more likely to use contraception and less likely to want additional children.

A framework is presented for investigating bivariate causal relations using Granger’s notion of causality. This framework is employed to test the relationship between the money supply and prices in Bangladesh using monthly data for the period 1973 to 1986. The results indicate evidence of significant unidirectional feedback running from prices to money. The analysis is extended to investigate the relationship between rates of change in money and prices and once again there is evidence of feedback from prices to money. The main conclusion is that strict exogeneity of the money supply is rejected. These results are consistent with a “structuralist” view of the Bangladesh economy. Policy implications are briefly discussed.

This study examines the labour use pattern and its determinants in rural Bangladesh. Based on a year-long weekly survey of selected households in two areas in Bangladesh, the study finds, inter alia, that about half the potential labour time in the rural area remains unutilised in economic activities; a large part of the unemployed time is accounted for by females and child labour. The study examines variations in labour use over seasons by sex and by household categories. A stabilising influence of non-agricultural employment on total employment is noted. Contrary to the normal expectations, however, the new seed-fertiliser-water technology is found to cause greater fluctuations in both agricultural and non-agricultural labour use over time. A regression analysis of the determinants of total labour use shows a negative influence of both ownership and education variables on labour use. Education is however seen to be positively associated with non-agricultural labour use. The study also examines some conceptual and definitional problems in the measurement of labour force and labour time.

This beneficiaries of Statutory Rationing are an elitist lot. They have on average 15 years of urban residence behind them, four-fifths having secure jobs in coveted Governmental or other public sector. Per capita income of typical SR beneficiary household during 1984/85 was estimated (in a companion paper) as significantly in excess of the corresponding figure for the average urban household. It is not surprising that this lot is not overly protective of each and every aspect of their entitlements under SR. For example, only 59% of full ration entitlement of an average beneficiary household are utilised. While not overly protective, household’s attitude to SR foodgrains is nevertheless informed by economic discretion. This is because underutilisation is not so much due to irregular lifting as to partial lifting. SR is taken advantage of on the strength of shrewd calculation of relative prices between the ration and market regime. Between 12 and 13% of the total allotment— or somewhat over 20% of what’s lifted— is resold, presumably for gain. The hallmark of a rationing system in a poor country ought to lie in the foodstress characteristics of those aided, not in their ability to take discretionary advantage of it. For, if rationing becomes virtually an extension of the market regime, the distinction is not worth making in practice. SR should in such a case be eliminated. It is befitting, although somewhat belated, that all subsidies on SR will be eliminated by 1989.

Taxes account for more than 80 per cent of total internal resources generated in Bangladesh. Indirect taxes contribute more than 75 per cent towards total tax yield and taxes on import more than 50 per cent. The overall tax structure is in general inelastic with respect to national income. Tax effort of Bangladesh is poor compared to other selected countries of the world and is dependent on foreign assistance