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Economic Transformation in Bangladesh and the Income Velocity of Broad Money: An Econometric Analysis

Author

Listed:
  • Ms. Sharmina Khanom

    (Lecturer, Department of Economics and Banking, International Islamic University Chittagong, Bangladesh)

Abstract

This study has undertaken an econometric analysis of economic transformation and income velocity of broad money. To find out the relevant determinants of income velocity of money this paper used time series data on year basis. This paper focus to discover the key determinants of the velocity of money in Bangladesh using the Augmented Dicky Fuller (ADF) unit root test to inspect the stationary, Engle-Granger residual-based cointegration approach to demonstrate the co-integrating association among variables. The main conclusions of this paper are: (i) relationship exists between the velocity of money and financial development. Other important variables that determine GDP growth show a negative relationship with the velocity of money but maintain a positive relationship with the deposit interest rate. Finally, this study concludes by giving some policy recommends for Bangladesh with respect to the velocity of broad money and the monetary policy.

Suggested Citation

  • Ms. Sharmina Khanom, 2019. "Economic Transformation in Bangladesh and the Income Velocity of Broad Money: An Econometric Analysis," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(2), pages 408-417, 02-2019.
    • Handle: RePEc:arp:tjssrr:2019:p:408-417
    as

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    References listed on IDEAS

    as
    1. Mohammad Zubair Khan, 1974. "Income Velocity of Money.A Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 13(2), pages 145-157.
    2. A.E.Akinlo, 2012. "Financial Development and the Velocity of Money in Nigeria: An Empirical Analysis," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 4(2), pages 097-113, December.
    Full references (including those not matched with items on IDEAS)

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