This study estimates a complete demand system for rural Bangladesh, applying the Almost Ideal Demand System (AIDS) model. The estimates of demand parameters are based on primary data from the rural household survey conducted by IFPRI in 1991/92. Even though the sample may over-represent the rural poor, the estimates of income elasticity of demand suggest that rural households in general are highly responsive to changes in income in adjusting their consumption patterns. Demands for commodities are also quite responsive to changes in their own prices, with the exception of salt. The estimates of cross-price elasticities indicate that substitution effects are strong, and therefore have important implications for price policies. Disaggregated by income groups, the estimates of demand parameters of rice and wheat suggest that low-income households are more price ad income responsive than high-income households are more price and income responsive than high-income households. Differences in elasticities in absolute values between the two groups are quite striking. The estimates conform with the findings of other studies that wheat is an inferior commodity in rural Bangladesh. This attribute makes wheat a self-targeting commodity for targeted food intervention programmes. The study contends that government price intervention programmes. The study contends that government price interventions may lead to serious price repercussions in the economy. In contrast, income generating programmes and policies foster higher levels of consumption for all normal Commodities, and thus, a steady growth in production by enhancing effective demand. 

This paper analyses the impact of three credit programmes – the Bangladesh Rural Advancement Committee (BRAC), the Bangladesh Rural Development Board’s Rural Development-12 (BRDB RD-12), and the Grameen Bank (GB), on current rate of contraception. These programmes are targeted to alleviate poverty by providing group-based credit to the rural poor in creating self employment opportunities. With small credits, these programmes combine family planning activities in terms of consciousness raising, awareness building and motivation. Sample survey data are used to analyse the problem of impact evaluation. The analyses show that the BRAC and the GB programmes have significantly positive impact on the current rate of contraception, while the BRDB RD-12 programme dues not have any such impact. It is also found that education, both of female and male separately, and child survivorship have independently position impact on current contraception. The present findings bear important implications for programmes aimed at reducing fertility.

The primary purpose of this paper is to discern the dynamic causal chain [in the Granger (temporal) sense rather than in the structural sensel] among real output, money, interest rate, inflation and the exchange rate in the context of a small Asian developing economy, such as Bangladesh. The methodology employed uses various unit root tests and Johansen’s co-integration test followed by vector error-correction modelling, variance decompositions, and impulse response functions in order to capture both the within-sample and out-of-sample Granger causal chain among macroeconomic activity. Given the relatively inward-oriented growth strategy of this small developing economy, where the real output was vulnerable to the vicissitudes of the dominant agricultural sector prone to weather, floods and cyclones as well as the external sector including volatile foreign assistance and labour remittances from aboard, our results quite in line with our expectations, ten to suggest that in the Granger-causality sense, output was relatively the leading variable being the most exogenous of all, and all other variables including money supply, prices, exchange rate, and interest rate had to bear the brunt of adjustment endogenously in different proportions in order to accommodate that real shock. The Granger-causal chain implied by our evidence that real output more often predominantly leads (rather than lags) money supply and the other three endogenous variables, is consistent more with the recent Real Business Cycle (RBC) theory than with the other two major macroeconomic paradigms such as, the Keynesian and the Monetarist. This finding has strong policy implications for any accommodative and/or excessive monetary expansion since it is likely to be dissipated in terms of relatively higher normal variables, such as, prices or exchange rates or interest rates rather than real output for a small developing economy like Bangladesh, given a relatively unstable overall macroeconomic environment.