The
paper investigates the nature of the relationship between Bangladesh’s savings
(defined as gross domestic savings or GDS) and the gross domestic product or
GDP using econometric methods. Annual time series data from 1980 to 2018 are
used to conduct a series of prior tests leading to two key tests on the
short-run and one long-run causality between these two important macroeconomic
variables. The objective of the econometric analysis is to identify the
direction of causality between these two macroeconomic variables. The paper’s findings
suggest a unidirectional causality running from economic growth to savings in
the short run. No long-run causality, however, was found in any direction under
any of the tests.
Keywords
Savings,
Growth, VECM, Granger Causality, Bangladesh
JEL
Classification Code
E21,
O4, C32
Recommended
Citation
Rahman, S. H., & Pabon, M. N. F. (2022). The saving-growth nexus in Bangladesh. The Bangladesh Development Studies, 45(3/4). 1-12.