Workers’ Remittance and Their Effect on the economic growth using HarrodDomer concept: an Empirical Analysis of Bangladesh

International Journal of Economics and Management Studies
© 2017 by SSRG - IJEMS Journal
Volume 4 Issue 7
Year of Publication : 2017
Authors : Md Kamrul Hasan Maruf, Md. Moniruzzaman Muzib
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How to Cite?

Md Kamrul Hasan Maruf, Md. Moniruzzaman Muzib, "Workers’ Remittance and Their Effect on the economic growth using HarrodDomer concept: an Empirical Analysis of Bangladesh," SSRG International Journal of Economics and Management Studies, vol. 4,  no. 7, pp. 26-31, 2017. Crossref, https://doi.org/10.14445/23939125/IJEMS-V4I7P106

Abstract:

Expatriate workers remittance payments are increasingly becoming a significant source of major international financial resources for many developing countries like Bangladesh. This paper investigates the causal link between remittances and economic growth in Bangladesh for the long run by using available annual data (1981-2014). From HarrodDomer model we know that economic growth can be increased by increasing domestic saving resources. To justify the impact of remittance on domestic saving we here use fixed capital formation as domestic saving and estimates the long run relationship between fixed capital formation and remittance. Interestingly we find a positive relationship between fixed capital formation and remittance which implies that remittance payments from migrant workers has positive impact on domestic saving and it can supplement domestic investment funds to enhance the capacity of the economy to grow.

Keywords:

Remittance, domestic savings, capital formation and economic growth.

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