Exports and economic growth in Bangladesh

This study investigates the effect of exports on economic growth in Banglad esh, based on a two-sector growth model Using annual data for the period 19 61-92, the article estimates an Autoregressive Conditional Heteroscedastic model of economic growth, which is found to capture the volatility of the B angladesh economy The results suggest that an increase in the share of inve stment in GDP significantly increases the growth rate of GDP in normal year s, but negligibly increases GDP growth in abnormal years. Abnormalities in the economy arise from war; political turmoil and natural disasters. The ke y finding is that export growth has significantly increased economic growth through its positive impact on total factor productivity in the economy. T he contribution of exports to economic growth was more pronounced during 19 82-90 when the government pursued a policy of trade liberalisation and stru ctural reform, and political turmoil was not persistent. This finding is no t sensitive to the choice of the model or the estimation technique.