| dc.description.abstract | Purpose: This paper aims to identify the impact of different components of
government expenditure on the economic growth of Bangladesh to recommend an
emphasis on that expenditure that can enhance the economic growth of Bangladesh.
Methodology: The methodology of the study is based on econometric analysis
including the Augmented Dickey-Fuller (ADF) test, lag length criteria,
co-integration test, VAR model estimation, pairwise Granger causality test, impulse
response function, and variance decomposition analysis using data from
Bangladesh Economic Review from 1994-1995 to 2016-17.
Findings: The study finds a unidirectional causality from economic growth to
non-development expenditure and a bi-directional causality between economic
growth and other expenditure. The results from the VAR model with lagged
variables of economic growth only show the positive and significant effect, another
expenditure has a negative significant impact but development and
non-development expenditure show the positive insignificant impact of government
spending on economic growth. Moreover, the impulse response function and the
variance decomposition model also support the result that development expenditure
has a positive influence on the economic growth of Bangladesh.
Limitations: Lack of previous research studies on the topic and limited access to
data are major research limitations.
Practical Implications: The result of the study will be a useful source of
information for the Bangladesh government for evolving strategies to rigorously
monitor the implementation of her budgets to enhance growth in the economy.
Originality: This paper uses the VAR analysis to investigate the impact of
government expenditure on economic growth in Bangladesh for the first time. This
study further deepens the previous research and draws a more realistic conclusion. | en_US |
