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Abstract
The economy of Bangladesh is experiencing sustained economic growth. Thus, the purpose of this study is to analyze how human capital and material, or physical capital interacts to influence the economic growth of Bangladesh. As a response to analyzing mechanisms of economic growth from 2000 to 2019, the present paper conducts quantitative research into the link between human capital, material capital, and economic growth in Bangladesh with the use of a Vector Autoregression Model (VAR). The study discovered that both human capital and physical capital can contribute to economic growth in different time dimensions, but their respective efficiency varies. As a result of the research, recommendations are made for policy development.
Highlights
Bangladesh is considered a market economy in the process of developing
Using data ranging from 2000 to 2019, we have developed an autoregressive vector model (VAR) to analyze the relationship between human capital, physical capital, and economic growth in Bangladesh
The Augmented Dickey - Fuller (ADF) test is used to measure the stability of the original variables in order to minimize the occurrence of spurious relationships
Summary
Bangladesh is considered a market economy in the process of developing. The Bangladeshi economy is one of the world's fastest growing. Bangladesh averaged 4.5% GDP growth in the decade following 2004. According to the World Bank, Bangladesh's economy grew 8.3% in the first quarter of 2019 making it the world's seventh fastest. The country has the 37th largest economy by nominal terms and is the 31st in purchasing power parity. Bangladesh is classified as a frontier market and a ‘ Eleven’ emerging market economy (Absar et al, 2021). Exports of ready-made garments, remittances from abroad, and domestic agricultural growth were the major factors driving its growth. The country mainly exports textiles, shipbuilding, fish, and seafood and leather goods
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