Quantifying the Interconnection of Economic Growth and Key Macroeconomic Factors Using the VECM Perspective of Bangladesh (Published)
The study examines the impact and signs of key macroeconomic factors on Bangladesh’s economic growth from 1980 to 2016 using VAR, the Johansen cointegration test, and the Vector Error Correction Model (VECM). Results show that the inflation rate has a slightly positive impact on economic growth, but it is not statistically significant. The real interest rate has a significant negative impact on economic growth, while the exchange rate has a significant positive impact. This work concludes that all variables have long-term effects and long-run causality, as well as a weak short-run influence on the economic growth rate.