Does nominal devaluation improve income distribution? Evidence from Bangladesh
Article
Article Title | Does nominal devaluation improve income distribution? Evidence from Bangladesh |
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ERA Journal ID | 21714 |
Article Category | Article |
Authors | Shahbaz, Muhammad (Author) and Rahman, Mohammad Mafizur (Author) |
Journal Title | South Asian Survey |
Journal Citation | 19 (1), pp. 61-77 |
Number of Pages | 17 |
Year | 2012 |
Place of Publication | New Delhi, India |
ISSN | 0971-5231 |
Digital Object Identifier (DOI) | https://doi.org/10.1177/0971523114539586 |
Web Address (URL) | http://sas.sagepub.com/content/19/1/61.full.pdf+html |
Abstract | The present paper aims to investigate the impact of nominal devaluation on income distribution in Bangladesh both in short and long runs. In doing so, ARDL (Auto Regressive Distributed Lag) bounds testing has been employed for cointegration, and ECM (Error Correction Model) has been used for short run dynamics. The empirical psychology has confirmed the existence of long run relationship between the variables. The ARDL-OLS estimated results reveal that nominal devaluation tends to decrease income inequality. Though economic growth appears to improve income distribution, non-linear link between both the variables, however, depicts Kuznets' inverted-U curve (1955). Financial development causes further deterioration in income distribution. Trade-openness contributes to income inequality as discussed in Leontief Paradox. |
Keywords | devaluation; income inequality; co-integration; economic growth; financial development; trade openness; Bangladesh |
ANZSRC Field of Research 2020 | 380112. Macroeconomics (incl. monetary and fiscal theory) |
380202. Econometric and statistical methods | |
440703. Economic development policy | |
Public Notes | Files associated with this item cannot be displayed due to copyright restrictions. |
Byline Affiliations | COMSATS University Islamabad, Pakistan |
School of Accounting, Economics and Finance | |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q1z83/does-nominal-devaluation-improve-income-distribution-evidence-from-bangladesh
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