Estimation of Export Supply Model of Bangladesh: Cointegration and Vector Autoregressive Approaches

Abstract

The broad objective of this study is to empirically estimate the export supply model of Bangladesh. The techniques of Cointegration, Engle-Granger causality, Vector Error Correction and Vector Auto-regression are applied to estimate the models of this study. Structural breakpoint or stability of the variables and impulse responses are also conducted in this study. The econometric analysis is done by using the time series data of the variable of interest which is collected from the secondary sources. The study has empirically tested the hypothesis and long run relationship and casualty between variables of the models. The study findings reveal that the trend growth rate of aggregate export is higher in post-liberalization period as compared to the pre-liberalization period. The Cointegration analysis shows that all the variables of the study are cointegrated at their first differences meaning that there exists long run relationship among the variables.