Abstract
We have developed a simple macroeconometric model of Bangladesh economy in order to evaluate the Five Year Development Plan. Although the model contains only five behavioral equations and two identities because of restrictions imposed by the availability of data, the sample period ex-post predictions are nearly as good as those of large scale econometric models of the US economy (OBE and WHARTON-EFU models). The consistency of the Five Year Plan was tested by comparing the plan target for major economic aggregates with projections of the same aggregates based on econometric model. Four scenarios were developed for projections. They are: ... ∞: Rapid restoration of business confidence with imports unrestricted, ... 0: Rapid restoration of business confidence with imports restricted, - ∞: Gradual restoration of business confidence with imports unrestricted, - 0: Gradual restoration of business confidence with imports unrestricted.
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