Exchange rate and Export of Bangladesh: Does Marshall-Lerner condition holds?

ABC Research Alert

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Field Value
Title Exchange rate and Export of Bangladesh: Does Marshall-Lerner condition holds?
Creator Roy, Shovon
Subject Exchange rate
export earnings
Granger Causality
Description Export is expected to have a favorable impact on GDP growth, and the exchange rate is expected to have a major impact on export and thus export earnings. The relationship between exchange rate and export is a hotly debated topic in macroeconomics, and the goal of this research is to see if the Marshall-Lerner condition holds incase of Bangladesh that is if devaluation of domestic currency increase export earnings. Explanatory variables of the model in the study are the exchange rate, foreign income (WGDP), and domestic income (DGDP). Cointegration approaches; Error Correction model, Granger Causality test are used in this study to estimate the long and short-run impacts. With time series data from 1973Q3 to 2018Q2, we used the Error Correction Model and the Granger Causality Test. The findings of VECM support short-run exchange rate and export adjustments. The bidirectional causality between exchange rate and export is established using the Granger causality test.
Publisher Asian Business Consortium
Date 2022-01-07
Type info:eu-repo/semantics/article
Format application/pdf
Source ABC Research Alert; Vol. 10 No. 1 (2022): January-April Issue; 09-16
Language eng
Rights Copyright (c) 2022 Shovon Roy, Jonaed

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