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Emigrant’s Remittances, Dutch Disease and Capital Accumulation in Bangladesh

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  • Hiroyuki Taguchi
  • Rifah Tamannah Shammi

Abstract

This article examines varying macroeconomic impacts of international emigrant remittances in Bangladesh since 1976 by using a vector auto-regression (VAR) framework. Bangladesh has recorded better economic performance during last two decades, 1996–2014, compared to earlier two decades, 1976–1995. The time-series analysis therefore uncovers some transition in the remittance impacts composed of the ‘Dutch Disease’ effect and the capital accumulation effect. The empirical results reveal the existence of the Dutch Disease effect for the first period, 1976–1995, but turned to show the positive impact on capital accumulation for the second period, 1996–2014. We speculate that the recent manufacturing-oriented policies together with institutional improvements have contributed to the transformation in the remittance impact towards a positive direction between two periods. JEL: F22, F39, O53

Suggested Citation

  • Hiroyuki Taguchi & Rifah Tamannah Shammi, 2018. "Emigrant’s Remittances, Dutch Disease and Capital Accumulation in Bangladesh," South Asian Journal of Macroeconomics and Public Finance, , vol. 7(1), pages 60-82, June.
    • Handle: RePEc:sae:smppub:v:7:y:2018:i:1:p:60-82
    DOI: 10.1177/2277978718760070
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    More about this item

    Keywords

    Bangladesh; emigrant’s remittances; Dutch Disease; capital accumulation; vector auto-regression estimation;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F39 - International Economics - - International Finance - - - Other
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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