Effect of Public Investment on Economic Growth in Bangladesh: An Econometric Analysis (Published)
Public investment traditionally holds the main structure of any economy. We consider annual development programme (ADP) is the main proxy for public investment in Bangladesh and also consider the gross capital formation for more reliable results. The link among GDP, PI and GCF are analyzed by our regression model, Ordinary Least Squares (OLS) method was used in estimation and we apply different statistical tools in order to know different statistical properties such as, we have used Ramsey’s RESET test for finding model misspecification. We also used the Jarque-Bera test for normality, Breusch-Pagan-Godfrey and White test for heteroscedasticity, the Durbin-Watson d test and the Breusch- Godfrey Serial Correlation LM Test for correlation, and Likelihood Ratio and the Wald test as specification. The variables were subjected to different unit root tests (ADF, PP, and KPSS) to justify stationary status. Though variables were non-stationary, the cointegration test (Engle Granger, CRDW, Johansen test) was conducted for long-run equilibrium as well as we use different types of tests to find out more reliable results. In addition, we checked the Granger Causality. From our study, we have seen that PI has positive effects on GDP in Bangladesh. According to our result, there is a positive impact of public investment on economic development. Findings point out that keeping the high public investment level in Bangladesh together with improvement in institutional surroundings would be beneficial for economic growth
Keywords: Co-Integration Test, Jarque-Bera Test, Public Investment, Unit Root Test, economic growth
PUBLIC INVESTMENT STATUS IN BANGLADESH (Published)
This paper endeavors to formally establish a link between public investment and economic growth. Public investment is one of the key factors of economic development. It is often seen as important ingredient for economic growth in developing countries like Bangladesh. The main purpose of the study is to investigate the impact of public investment on economic growth in Bangladesh. I also examine the public investment of Bangladesh. We consider ADP is the main proxy for public investment in Bangladesh. We also consider the gross capital formation for more reliable results. In our country, ADP traditionally holds the central place in our national economic planning. ADP regularly promotes economic growth, ensures infrastructural development, reduces poverty and improves the environment. The link among GDP, PI and GCF are analyzed by our regression model. From our study, we have seen that PI has positive effects on GDP in Bangladesh. So, in the light of that result, increases in public investment should have a positive net impact on economic growth which augments our economic development in future. This thesis concludes with a number of policy recommendations arising from the research findings.
Keywords: ADP, GCF, GDP, Public Investment, economic growth