Trade and Financial Liberalisation and Endogenous Growth in Bangladesh

Abstract

This paper empirically explores the joint impact of financial and trade liberalisation on economic growth in Bangladesh using various time series techniques, endogenous growth theory and annual data from 1975–95. Our empirical results are in accordance with the predictions of endogenous growth theory that both financial and trade liberalisation, along with investment in human capital enhance economic growth, suggesting the case for liberalisation of both the financial and trade sectors and suggesting that government initiatives in education policy may expedite economic growth. Results are robust across methodologies. [E52, F43, O11, O53]