Macroeconomic Impact of Remittances: In the Context of Bangladesh

Tabassum, Sabrina (2014). Macroeconomic Impact of Remittances: In the Context of Bangladesh Master's Thesis, School of Economics, The University of Queensland.

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Author Tabassum, Sabrina
Thesis Title Macroeconomic Impact of Remittances: In the Context of Bangladesh
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2014-11-10
Thesis type Master's Thesis
Supervisor Temesgen Kifle
Total pages 105
Language eng
Subjects 140102 Macroeconomic Theory
Formatted abstract
Bangladesh is one of the major remittances earning countries in the world where a large percentage of the country’s GDP is supported by the migrants’ remittances. This study explores the impact of remittances on macroeconomic factors of Bangladesh. To conduct the research, I have used annual time series data covering the period from 1981 to 2013. This study used GDP, Private Consumption and Investment of Bangladesh as dependent variables and Remittances inflow to Bangladesh as independent variable. All the variables are made stationary after first differencing. Then cointegration test has been conducted to explore the presence of long-run relationship where I have found no integration among the variables. After identifying optimal length of lag of variables, Granger-Causality test has been carried out whether remittances have any causal relation with the GDP, private consumption and investment. A VAR system has been estimated with the lagged variables and impulse response estimation has been generated to show the short-run relationship among remittances and GDP, remittances and private consumption and remittances and investment. The results of the study showed that remittances have unidirectional causal impact on GDP and private consumption but no causal relationship with investment. These findings indicate that remittances are mostly used for private consumptions which affect GDP, but remittances do not cause investment hence do not affect the investment in Bangladesh.
Keyword Remittances
Granger Causality

Document type: Thesis
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