Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh
Empirical results show that exchange rate volatility has a negative impact on the economic growth of Bangladesh. In contrast, this paper endeavors to analyze whether level of financial development of Bangladesh has any impact on the exchange rate volatility and growth relationship. To test this, Ord...
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| Format: | Article |
| Language: | English |
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EconJournals
2014-06-01
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| Series: | International Journal of Economics and Financial Issues |
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| Online Access: | https://dergipark.org.tr/tr/pub/ijefi/issue/31962/351996?publisher=http-www-cag-edu-tr-ilhan-ozturk |
| _version_ | 1797919039661539328 |
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| author | Humyra Jabeen Bristy |
| author_facet | Humyra Jabeen Bristy |
| author_sort | Humyra Jabeen Bristy |
| collection | DOAJ |
| description | Empirical results show that exchange rate volatility has a negative impact on the economic growth of Bangladesh. In contrast, this paper endeavors to analyze whether level of financial development of Bangladesh has any impact on the exchange rate volatility and growth relationship. To test this, Ordinary Least Square technique has been used considering the interaction between financial development and exchange rate volatility. The findings of the study confirm that growth of this country is adversely affected by exchange rate variability because of the poorly developed financial market of Bangladesh. As the level of financial development is thin, anticipation of exchange rate fluctuations discourages innovation which in turn lowers the growth of Bangladesh. Hence, despite of exchange rate controls have been in place for a long time, those trades oriented policies failed to raise the long run growth of Bangladesh. |
| first_indexed | 2024-04-10T13:39:08Z |
| format | Article |
| id | doaj.art-964500c0fcde4c7f9ea4d48f443a4586 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:39:08Z |
| publishDate | 2014-06-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-964500c0fcde4c7f9ea4d48f443a45862023-02-15T16:11:14ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382014-06-01422582631032Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of BangladeshHumyra Jabeen BristyEmpirical results show that exchange rate volatility has a negative impact on the economic growth of Bangladesh. In contrast, this paper endeavors to analyze whether level of financial development of Bangladesh has any impact on the exchange rate volatility and growth relationship. To test this, Ordinary Least Square technique has been used considering the interaction between financial development and exchange rate volatility. The findings of the study confirm that growth of this country is adversely affected by exchange rate variability because of the poorly developed financial market of Bangladesh. As the level of financial development is thin, anticipation of exchange rate fluctuations discourages innovation which in turn lowers the growth of Bangladesh. Hence, despite of exchange rate controls have been in place for a long time, those trades oriented policies failed to raise the long run growth of Bangladesh.https://dergipark.org.tr/tr/pub/ijefi/issue/31962/351996?publisher=http-www-cag-edu-tr-ilhan-ozturkexchange rate volatility growth financial development |
| spellingShingle | Humyra Jabeen Bristy Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh International Journal of Economics and Financial Issues exchange rate volatility growth financial development |
| title | Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh |
| title_full | Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh |
| title_fullStr | Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh |
| title_full_unstemmed | Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh |
| title_short | Impact of Financial Development on Exchange Rate Volatility and Long-Run Growth Relationship of Bangladesh |
| title_sort | impact of financial development on exchange rate volatility and long run growth relationship of bangladesh |
| topic | exchange rate volatility growth financial development |
| url | https://dergipark.org.tr/tr/pub/ijefi/issue/31962/351996?publisher=http-www-cag-edu-tr-ilhan-ozturk |
| work_keys_str_mv | AT humyrajabeenbristy impactoffinancialdevelopmentonexchangeratevolatilityandlongrungrowthrelationshipofbangladesh |