The Effectiveness of Monetary Policy and Fiscal Policy in Bangladesh

Keynesian and the monetarist theorists have been debating for a long time on the effectiveness of fiscal and monetary policy. The outcomes of several empirical researches are open to further studies and those outcomes suggest that none of the policies can be thought of as superior to the other. The...

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Bibliographic Details
Published in:The journal of applied business and economics 2015-03, Vol.17 (1), p.78
Main Authors: Chowdhury, Labonnya Sadia, Afzal, Munshi Naser Ibne
Format: Article
Language:English
Subjects:
Comparative analysis
Economic activity
Economic growth
Economic stabilization
Effectiveness
Efficiency
Employment
Expenditures
Fiscal policy
GDP
GNP
Government spending
Gross Domestic Product
Gross National Product
Inflation
Inflation rates
Influence
Interest rates
Macroeconomics
Monetary policy
Quantity theory of money
Studies
Time series
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Summary:Keynesian and the monetarist theorists have been debating for a long time on the effectiveness of fiscal and monetary policy. The outcomes of several empirical researches are open to further studies and those outcomes suggest that none of the policies can be thought of as superior to the other. The relative effectiveness of fiscal and monetary policies in any economy depends on the prevailing economic and political conditions at any point in time. In order to determine the influence of fiscal and monetary policy on the economic activity in Bangladesh we have used time series analysis on the annual data for the period 1980-2012. The results obtained show that monetary and fiscal both the policies are equally effective in simulating economic growth in Bangladesh. Moreover it has long run relationship with co-integrated impact on economic growth.
ISSN:1499-691X