Remittance and Dutch Disease Phenomenon: Case of Bangladesh and Pakistan
DOI:
https://doi.org/10.18034/abr.v11i1.524Keywords:
Remittance, Real Exchange Rate, Dutch Disease, Vector Auto-regression, Johansen Co-integration Approach, Vector Error Correction method, Granger-Causality TestAbstract
The paper has been designed to explore whether the impact of remittance on the real exchange rate causes any Dutch disease problem for Bangladesh and Pakistan. These two South Asian countries have been targeted to figure out if the outcomes are similar for the countries with almost the same economic structure. Johansen co-integration approach, Vector Error Correction Method (VECM), and Granger Causality test have been employed taking real exchange rate as regressand and remittance and other attributing variables as explanatory variables with an aim to address the study objective. The study has used data from the World Development Indicators database ranging from 1986 to 2019. The results for both countries reveal that remittance is significantly negatively related to the real exchange rate which implying the appreciation of the domestic currency. However, this appreciation causes the Dutch disease phenomenon for neither Bangladesh nor Pakistan.
Downloads
References
Published
Issue
Section
License
Asian Business Review is an Open Access journal. Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal the right of first publication with the work simultaneously licensed under a CC BY-NC 4.0 International License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of their work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal. We require authors to inform us of any instances of re-publication.
How to Cite
