See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/270450475

Export, Import and Inflation: A study on Bangladesh

Article · February 2014

CITATIONS READS
10 10,517

2 authors, including:

Dewan Muktadir-Al- Mukit

Sheffield Hallam University
21 PUBLICATIONS 213 CITATIONS

SEE PROFILE

All content following this page was uploaded by Dewan Muktadir-Al- Mukit on 05 January 2015.

The user has requested enhancement of the downloaded file.

46 Amity Global Business Review February

Export, Import And Inflation: A Study On Bangladesh

Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah

The study investigates the relationship of inflation with import and export by using monthly time series
data for the economy of Bangladesh over the period of 1994 to 2011. This study employed a number of
econometric techniques of measuring the long and short term relationship between variables using the
concept of Cointegration and Error Correction Model and analysis of Variance Decomposition. Causal
relationships have been investigated using Granger causality test. By employing Cointegration technique
it is observed that in the long run, a one percent increase in import and in export contributes 3.21 %
increase and 1.91 % decrease in inflation respectively. The estimated error correction coefficient indicates
that 0.09 percent deviation of the inflation rate from its long run equilibrium level is corrected each year.
The results of variance decompositions exposed that export has the highest shock impact on inflation
between the variables in the inflation system. Finally, Granger causality analysis suggests the existence of
a bilateral causality between inflation and export and a unidirectional causality from Inflation to import.

Keywords: Inflation, Import, Export, Cointegration, Granger Causality, Bangladesh

Introduction materials. So, higher import tends to increase

In the era of globalization we have entered in an
open economy situation where international trade
plays a vital role in the process of production
and consumption decision. In a closed economic
situation, besides a numbers of causative factors,
inflation is attributed by excess demand created
within that economy. But in open economy inflation
is also affected by international trade situation that
is import and export condition. According to Dexter
et al. (2005), “The availability of imports can affect
domestic inflation directly via the prices of these
imports included in the price index, and indirectly
through competition with domestic goods and
services. Exports affect supplies of products
available to domestic consumers, and hence prices.
That is, international trade serves like an ‘open
door’, such that pressures within the economy are
mitigated by the flows of products into and out of
that door”. When demand exceeds the domestic
output level then the mismatch between demand
and supply condition leads to inflationary condition.
Responding to this excess demand country may avail
import policy. On the other hand, when demand is
below the level of domestic output, inflation will
begin to erode. Moreover, excess output can be
handled by exporting to others countries. But these
import and export situations also contribute to the
genesis of inflation. Normally, a rise in imports will
cause depreciation in the exchange rate. This tends
to increase inflationary pressure through make
import costly. Moreover, when a country imports
raw material then depreciation of local currency
or appreciation of foreign currency makes import
expensive and subsequently the cost of production
for goods increases due to a rise in price of raw
inflation. On the other hand, a rise in exports will
cause appreciation of local currency or depreciation
of foreign currency and therefore there will be a
reduction in inflation.
Inflation makes everyone worse off by reducing
the purchasing power of incomes, eroding living
standards and adding, in many ways, to life’s
uncertainties (Lipsey et al. 1982: 752). In recent
times, the Bangladesh economy has experienced a
rising rate of inflation which is a major threat to the
macroeconomic stability of the country. A number
of factors contribute to this inflation of Bangladesh.
Imported inflation through depreciation of the
exchange rate, import dependency, money supply
growth, remittance flow, interest rate differentials,
high growth rate of population, increase of money
wage without productivity are the major factors
which result inflation in Bangladesh. In our present
study, we consider two important causative factors
of inflation -import and export to show the impact
of these variables in the process of determination of
inflation of Bangladesh.
This paper analyzes the relationship of inflation
with import and export in Bangladesh between 1994
and 2011 using monthly time series data. For this
purpose the paper employs different econometrics
techniques. The rest of the paper proceeds as
follows: section two provides a brief survey of the
literature review, section three describes the data
with methodology, section four shows the empirical
findings with analysis. The last section of the paper
provides concluding remarks. The findings of the
study provide an insightful thought regarding anti-
2014 Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah
inflationary policy not only for Bangladesh but also
for other developing countries specially nations of
South Asian region where export and import have
a crucial part towards genesis of inflation.
Literature Review
The determinants of inflation are discussed widely
in the literature. Economists from different schools
of thought have presented their theories regarding
the causes of inflation. In the Keynesian era inflation
was believed to be caused by either an increase
in aggregate demand i.e. ‘demand-pull inflation’
or a decrease in aggregate supply i.e. ‘cost-push
inflation’. The economists of this era considered
fiscal policy as an important mechanism to control
inflation. The model of Phillips Curve developed
by A.W. Phillips presents the idea of a ‘trade-off’
between inflation and unemployment. This model
was further modified by Lipsey (1960), Samuelson
and Robert Solow (1960). The model suggests
a negative relationship between inflation and
unemployment. The model of “the quantity theory
of money” tells that money supply has a direct,
proportional relationship with the price level. It
emphasizes the role of monetary policy as against
fiscal policy in controlling inflation. A large number
of empirical studies have investigated the possible
determinants of inflation in both developed and
developing countries. Factors typically related to
fiscal imbalances such as higher money growth and
exchange rate depreciation arising from a balance
of payments crisis dominate the inflation process
in developing countries, as discussed by Montiel
(1989); Sergent and Wallace (1981); Liviatan and
Piterman (1986).
A number of studies focus on the dynamic
relationship of inflation with import and export.
Using monthly time series data for the Turkish
economy over the period 1995to 2010, the study of
Ulke et al. (2011) shows that there is a long-run and
dynamic relationship between inflation and import.
A unidirectional causality from import to inflation
is also found in that study. Abidemi and Malik
(2010) have critically analyzed the dynamic and
simultaneous inter relationship between inflation
and its determinants in Nigeria. Johansen co-
integration technique and error correction model
are used to analyze determinants of inflation for the
time series data for the period from 1970 to 2007.
The findings reveal that among others variables
imports have positive association with inflation
47
rate while exchange rate is indirectly associated to
inflation. Lim and Papi (1997) have studied about
the determinants of inflation in Turkey. In this
study, they have adopted time series data from
1970 to 1995 and applied Johansen Co integration
technique to find out results. The analysis concludes
that money, wages, prices of exports and prices of
imports have positive influence on domestic price
level where as exchange rate exerts inverse effect
on the domestic price level in Turkey. Gylfason
(1997) studied on the relationship between export
and some of its determinants including inflation
by statistical methods in cross-sectional data
covering 160 countries. He concludes that high
inflation has tended to be associated with low
exports. Moreover his study shows that exporters
of primary commodities to have more inflation
than the exporters of manufactures. In the US
economy context the study of Dexter et al. (2005)
shows that international trade has a significant
separate influence on inflation where imports have
a negative relationship with inflation and exports
have a positive relationship with inflation. Khan
et al. (2007) attempted to determine the most
significant explanatory factors for inflation trends
in Pakistan using time series data from 1972 to 2005.
The analysis concludes that government sector
borrowing, real demand, private sector borrowing,
import prices, exchange rate, government taxes,
previous year consumer price index and wheat
support prices are found to have direct contribution
in consumer price index of Pakistan. Loungani and
Swagel (2001) conclude that as a determination
of inflation, consideration of money growth and
exchange rate regimes are more important in
countries with floating exchange rate regimes than
in those with fixed exchange rates.
There are also a number of studies regarding the
possible determinants of inflation in context of
Bangladesh. On the context of the structuralist-
monetarist controversy, Taslim (1982) attempted to
analyze the inflationary process in Bangladesh using
the data for 1960 to 1980. The findings indicate that
the rate of change of money supply and devaluation
are the most significant explanatory variables. Any
devaluation of the domestic currency is followed by
an almost equal proportionate increase in the rate of
inflation, while an increase in money supply does
not induce an equal proportionate increase in the
inflation rate. The empirical test of Begum (1991)
shows that the significant variables for inflation are
48 Amity Global Business Review
agricultural and import bottlenecks, government
expenditure, rate of interest, wage rate, bank
credit and expected inflation. Haque and Emran
(1992) showed that the ratio of imports to total
food availability significantly affected the inflation
in Bangladesh. It had been observed that among
supply side factors of inflation, import price index
is the most significant variable (Majumder, 2006).
The study of Kanam and Rahman (1995) indicates
that among a number of supply side variables-
import prices and money wages affect the inflation
significantly and positively while remittance is
found insignificant in forecasting inflations. The
study of Mortaza (2006) reveals that exchange
rate depreciation positively affects inflation in
Bangladesh.
Data & Methodologies
The study investigates the relationship between
inflation with two important macroeconomic
variables named Import and Export. . The data
set comprises of monthly time series data for
Bangladesh over the total 216 sample periods of
January, 1994 to December, 2011. The sources
include Global Economic Monitor released by the
World Bank.
Inflation, the dependent variable of the study, is
measured in terms of Consumer Price Index (CPI)
reflects change in the cost to the average consumer
of acquiring a basket of goods and services. Both
import and export of goods and services is measured
in terms of constant 2000 U.S. millions dollars. The
descriptive statistics of the variables are shown in
Appendix section.
The structural model to estimate the relationship
between log transformed variables is stated below:
LY t = β 0 + β1 LIMPORTt + β 2 LEXPORTt + ε t
Where, LY is the natural log of CPI, LIMPORT is the
natural log of import and LEXPORT is the natural
log of export. β 0 and β i are the parameters known
as the intercept and slope coefficient and ε is the
classical random disturbance term.
To check for non-stationarity property, the data
are subjected to Augmented Dickey and Fuller test
(ADF test). The following regression is for ADF test
purpose:
February
∆Yt = β1 + β 2 t + δYt −1 + α i Σ
∆ Yt −i + ε t
Where ε t is a white noise error term and ∆Yt −1 =
( Yt −1 − Yt − 2 ) and so on are the number of lagged
difference term which is empirically determined.
Using Schwarz Information Criterion (SIC) the
lag length is selected automatically by E-views 7.0
software.
Our next step is to determine whether the variables
have a stable and non-spurious cointegrating
relationship among themselves. For the purpose
of testing Cointegration we have chosen the
Johansen procedure and lag order is selected on
the basis of Schwarz Bayesian Criteria (SBC). The
Johansen approach of Cointegration test is based
on the following Vector Autoregressive model:
Yt = φD t + Π t Yt −1 + .... + Π k Yt −k + ε t
Where is deterministic term, is an (n x 1) vector
of I (1) variables, is (n x n) matrix of parameters
and is (n x 1) vector of white noise error.
If there is at least one cointegrating relationship
among the variables, then the short run causal
relationship among these variables can be determined
by estimating the Vector Error Correction Model
(VECM). It provides information about the speed of
adjustment to long run equilibrium and avoids the
spurious regression problem (Engle and Granger,
1987). The Error Correction Model (ECM) is based on
following regression: ∆Yt = α + β ∆X t + β U t −1 + ε t
Where U is the one period lagged value of the
residual and the error correction component of the
model which measures the speed at which the prior
deviations from equilibrium are corrected, and 
represents first-differences operator.
After VECM model is estimated, then we employ
Variance Decompositions and Impulse Response
Function to investigate the behavior of an error shock
to each variable on its own future dynamics as well
as on the future dynamics of the other variables in the
VECM system. Variance decomposition measures
the percentage of forecast error of variation that is
explained by another variable within the short-run
dynamics and interactions.
2014 Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah 49

The final step of our analysis is to test for causality Table 1: Results of ADF test
between study variables in the long run. The test
involves estimating the following regressions to Variables ADF Test Statistic
examine Granger causality: Level First difference
LCPI -0.100854 -14.59071***
LIMPORT -3.820351** -7.920940***
n n
Yt = Σα X
i =1
i t −i + Σβ Y
j =1
j t− j + ε 1t ------------- (1) LEXPORT -4.608774*** -15.56251***
Note: *** and ** indicate statistically
significant at the 1% and 5% level, respectively.
m m
Xt = Σλ X
i =1
i t −i + Σδj =1
j Yt − j + ε 2t ------------ (2) The results in Table 1 clearly indicate that ADF tests
fail to reject the null of non-stationary for LCPI.
Among others variables LIMPORT and LEXPORT
are stationary at the 5% and 1% level of significance
Where it is assumed that the disturbance and are respectively. LIMPORT and LEXPORT both have
uncorrelated. First regression assumes that current ADF test statistic which is less than the critical
value of Y is related with the past values of X; and value and thus are stationary in levels, implying
second regression proposes that current value of X that these are integrated of order 0 or I (0). After
is related with the past values of Y. first differencing the result shows that LCPI became
stationary at the 1% level, implying that this variable
Analysis & Findings is integrated of order 1 that is I(1).
A. Stationarity Test
The Table 1 shows ADF test statistic used to examine The following graph shows the combined
the null of a unit root in the CPI, import and export. relationship of stationarity and nonstationarity
among the variables.

Figure 1: Trend with stationary and non stationary

50 Amity Global Business Review February

Table 2: OLS Regression results

Coefficient Std. Error t-Statistic Prob.

C 0.536206 0.086304 6.212980 0.0000
LIMPORT 0.315214 0.036217 8.703350 0.0000
LEXPORT 0.290565 0.027115 10.71618 0.0000
R-squared 0.973941 Mean dependent var 4.502130
Adjusted R-squared 0.973696 S.D. dependent var 0.304555
S.E. of regression 0.049394 Akaike info criterion -3.164170
Sum squared resid 0.519678 Schwarz criterion -3.117291
Log likelihood 344.7304 Hannan-Quinn criter. -3.145231
F-statistic 3980.307 Durbin-Watson stat 0.361064
Prob(F-statistic) 0.000000

B. The Ordinary Least Square (OLS) Regression among the variables and the previously estimated
Model model is a sign of spurious regression.
The log-transformed CPI and others causative
factors of inflation have been used in developing Table 3: Breusch-Godfrey Serial Correlation LM
the OLS models. The OLS result has been presented Test
in the following Table 2.
F-statistic 425.7273 Prob. F 0.0000
The estimation of the equation by direct OLS gives O b s * R - 144.1950 Prob. Chi- 0.0000
the following equation: squared Square(1)

LCPI= 0.54+ 0.32 LIMPORT + 0.29 LEXPORT C. Testing Cointegration

The next step in our empirical analysis is to test for
The slope coefficients of all independent variables co integration. Since the variables are considered to
are statistically significant at 1 % level. It is found be I (1), the co integration method is appropriate
that the relationship of CPI with Import and Export to estimate the long run relationship between
is positive. The result is implying that in Bangladesh, variables. To explore the number of cointegrating
a one percent increase in Import and in Export vectors, Maximal Eigen value and Trace statistics
contributes 0.32 % and 0.29 % increase in inflation have been used. The results of Trace statistics and
respectively. Moreover, F = 3980.307 and P = 0.000 Maximum Eigen value were shown in Table 4 and
imply that the regression model significantly fits Table 5 respectively.
the data. Finally, R indicates that about 97 percent
variation of CPI can be explained by total variations Table 4: Unrestricted Cointegration Rank Test
in independent variables. But the nonstationarity (Trace)
of variable biased the previous estimation, and
the low value of DW can be interpreted as an Hypothesized T r a c e 0 . 0 5 Prob.**
indicator of spurious regression. To confirm the No. of Eigenvalue Statistic Critical
autocorrelation problem we followed Breusch- CE(s) Value
Godfrey Serial Correlation LM Test and presented
None * 0.132968 0.0001
in Table 3. The null hypothesis of the LM test is
48.62985 29.79707
that there is no serial correlation up to lag order m,
where m is equal to 1 in this case and the Obs*R- A t 0.071267 0.0198
squared statistic is the Breusch-Godfrey LM test most 18.09644 15.49471
statistic. The result indicates that we can reject the 1*
null hypothesis of no serial auto correlation at 1% A t 0.010573 .274639 .841466 0.1315
significance level. So there exist autocorrelation most 2
2014 Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah 51

Trace test indicates 2 cointegrating eqn(s) at the

0.05 level Table 6: Normalized cointegrating coefficients
* denotes rejection of the hypothesis at the 0.05
LCPI LIMPORT LEXPORT
level
**MacKinnon-Haug-Michelis (1999) p-values 1.000000 -3.210392 1.911637
Std. Error 0.53451 0.40156
Table 5: Unrestricted Cointegration Rank Test
(Maximum Eigenvalue) t-value -6.00623 4.76052
P- value 0.02661** 0.04140**
Hypothesized T r a c e 0 . 0 5 Prob.**
No. of Eigenvalue Statistic Critical Note: ** indicates statistically significant at the 5%
CE(s) Value level
None * 0.132968 30.53342 21.13162 0.0018
The above signs of coefficients are reversed because
At most 0.071267 15.82180 14.26460 0.0281
1* of the normalization process. The estimation of the
equation by Cointegration gives the following one:
At most 0.010573 2.274639 3.841466 0.1315
2
LCPI = 3.21 LIMPORT - 1.91 LEXPORT
Max-eigenvalue test indicates 2 cointegrating eqn(s)
at the 0.05 level This clearly shows that in the long run import has
a positive impact on inflation. On the other hand,
**MacKinnon-Haug-Michelis (1999) p-values in the long run export has a negative impact on
inflation. The relationship between CPI and all
The Trace statistic and Maximal Eigen statistic others independent variables are found statistically
both identified two cointegrating vectors. After significant at the 5% level. The result is implying
normalization the cointegrating vector on LCPI, that in Bangladesh in the long run, a one percent
normalized cointegrating coefficients were increase in import and in export contributes
estimated as reported in Table 6. 3.21 % increase and 1.91 % decrease in inflation
respectively.

D. Vector Error Correction Model

In order to find the short run relationships among
the variables, vector error correction mechanism
has been applied. The results of VECM were shown
in Table 7.

Table 7: Error Correction Model

Vector Error Correction Estimates

Sample (adjusted): 1994M03 2011M12
Included observations: 214 after adjustments
Error Correction: ∆ LCPI ∆ LIMPORT ∆ LEXPORT
ECMt-1 -0.009431 0.127723 * 0.235869
[-0.95892] [ 3.28879] [ 2.26807]
∆ LCPI(-1) -0.022677 -0.262292 0.442577
[-0.32654] [-0.95647] [ 0.60269]
∆ LIMPORT(-1) 0.004304 0.389555** 0.261867
[ 0.27216] [ 6.23833] [ 1.56602]
∆ LEXPORT(-1) -0.001881 -0.016271 -0.408725**
[-0.30780] [-0.67439] [-6.32630]
52 Amity Global Business Review February

C 0.005351*** 0.006392 0.008726

[ 8.65689] [ 2.61867] [ 1.33504]
R-squared 0.048592 Log likelihood 759.9367
Adj. R-squared 0.025721 Akaike AIC -7.046138
Sum sq. resids 0.010315 Schwarz SC -6.951764
S.E. equation 0.007042 Mean dependent 0.005247
F-statistic 2.124662 S.D. dependent 0.007135
Note: i) Figures in parenthesis represent the t-statistics
ii) ***, ** and * indicate statistically significant at the 1%, 5% and 10% level, respectively.

The estimated error correction coefficient indicates The results of Table 8 shows that the dynamic
that about 0.9 percent deviation of the CPI from its contrast in inflation explains 100% of the components
long run equilibrium level is corrected each period of variation in the first period when the shock by a
in the short run, while the gaps in the import and standard deviation of one in the variable itself, and
export close by about 12.77 percent and 23.59 in the second period it goes to 98.90 % of the error
percent respectively. The result implies that in the prediction of the variability. During the second
short run the association of inflation with import is period 0.05 % and 1.04 % variation in inflation is due
positive and with export is negative. to variation in import and export respectively. The
increase in the proportion attributable to variation
E. Variance Decompositions in import and export continue to fluctuate with a
To examine further the short- run dynamic tendency to increase that up to about 2.19 % and
properties of inflation, we employ the forecast error 14.23 % respectively in the period of the twelfth.
variance decomposition. Variance decomposition
indicates the amount of information each variable F. Impulse Response Function
contributes to the other variables in a vector auto Figure 2 shows impulse responses. It shows the
regression (VAR) models. The results are presented impact of a one standard deviation generalized
in Table 8. innovation in the import and export on the inflation
of Bangladesh. From the figures, we can see that the
Table 8: The Results of Variance Decompositions results are in line with the variance decomposition,
where inflation responds positively for shocks in
Period S.E. LCPI LIMPORT LEXPORT import and export overtime. Moreover, export has
1 0.007042 100.0000 0.000000 0.000000 the highest shock impact on inflation between the
2 0.009827 98.90350 0.051580 1.044916 variables in the inflation system.
3 0.012034 97.56952 0.204451 2.226031
4 0.013965 95.70119 0.461518 3.837295
5 0.015721 93.75422 0.767201 5.478578
6 0.017355 91.76414 1.082787 7.153073
7 0.018893 89.86461 1.377838 8.757556
8 0.020350 88.08031 1.638563 10.28112
9 0.021736 86.43832 1.859716 11.70197
10 0.023060 84.93754 2.042196 13.02026
11 0.024328 83.57392 2.189571 14.23651
12 0.025545 82.33696 2.306584 15.35645
2014 Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah 53

Figure 2: Impulse Response Function

LEXPORT does not 2.36335 0.0966* Yes

G. Granger Causality Test Granger Cause LCPI
Our final step of analysis is to test for causality LCPI does not Granger 6.39978 0.0020*** Yes
between inflation and it’s determinants in the long Cause LEXPORT
run. We carry out granger causality tests pairwise LIMPORT does not 0.57785 0.5620 No
on series LCPI, LIMPORT and LEXPORT with lag Granger Cause LCPI
length 2. LCPI does not Granger 11.1140 0.00003*** Yes
Cause LIMPORT
Table 9: Granger Causality Test
Note: i) No. of Obs. =214
Null Hypothesis F-Statistic P-Value Granger
ii) ***, ** and * indicate statistically significant at the
Causality 1%, 5% and 10% level, respectively.
54 Amity Global Business Review
Granger-causality results suggest that the null
hypotheses that LEXPORT does not Granger cause
LCPI is rejected at 10% significance level and LCPI
does not Granger cause LEXPORT is rejected at
1% significance level which means there exists a
bilateral causality between inflation and export.
Furthermore, the null hypotheses that LCPI does
not Granger because LIMPORT is rejected at 1%
significance level which states that there is a uni-
directional causality running from inflation to
import.
Conclusions
This study attempts to investigate the relationship
of inflation with import and export position in
Bangladesh for the period of 1994 to 2011 using
different econometric frameworks. The results
of the analysis reveal that both in the long run
and in the short run import has a positive and
export has a negative impact on inflation where
the coefficients of all the explanatory variables
are found statistically significant. Evidence from
Granger causality analysis suggests that there exists
a bilateral causality between inflation and export.
No causality is found from the direction of import
to inflation rather there is existence of unidirectional
causality running from inflation to import.
The economy of Bangladesh has faced with
inflationary trends over the years. So, it is necessary
to determine the impact and consequence of
causative factors of inflation. The findings of the
study need to put in place so that they can be used
in the process of formulation of anti-inflationary
policies considering import and export decision
properly with a view to ensuring the stable
economic growth of the country.
References
1. Abidemi, O. and Malik,S. (2010) .“Analysis of Inflation
and its determinant in Nigeria”, Pakistan Journal of Social
Sciences, 7(2), pp 97-100.
2. Begum, N. (1991). “A Model of Inflation for Bangladesh”,
Philippines Review of Economics and Business, 28 (1), pp
100-117.
3. Dexter, A.S.; Levi, M.D. and Nault, B.R. (2005). “International
Trade and the Connection between Excess Demand and
Inflation”, Review of International Economics, 13 (4), pp
699-708.
February
4. Engle, R. and Granger, C. (1987) “Co-integration and
Error-correction: Representation, Estimation and Testing”,
Econometrical, 55, pp. 251-276.
5. Gylfason, T. (1997). “Exports, Inflation, and Growth,” IMF
Working Papers, 97/119, International Monetary Fund.
6. Haque, S. and Emran, M. (1992). “Specification Tests - A Case
Study of Inflation in Bangladesh”, Chittagong University
Studies, Commerce, 8.
7. Khan, A. A. ; Ahmad, Q. M. and Hyder, K. (2007).
“Determinants of Recent Inflation in Pakistan”, MPRA paper
no. 16254, pp 1-16.
8. Khan is, R. and Rahman, M. (1995). “The causative factors of
inflation in Bangladesh-An Econometric Study”, Chittagong
University Studies, Social Science, 16 (1), pp 100-116.
9. Lim, C. and Papi, L. (1997). “An Econometric Analysis of the
determinants of Inflation in Turkey”, IMF Working paper
no. 170, pp 1-32.
10. Lipsey, R. (1960). “The Relationship between Unemployment
and the Rate of Change of Money Wage Rates in the United
Kingdom, 1862-1957, A Further Analysis”, Econometrical,
27, pp. 1-31.
11. Lipsey, R. ; Steiner, P. and Purvis, D. (1982). Economics,
7th ed., pp 752, New York: Harper Collins Pub. Inc.
12. Leviatán, N.; Nissan; Pitaran, S. (1986). “Accelerating
inflation and balance-of-payment crises, 1973-1984”, The
Israeli economy, pp 320-346.
13. Loungani, P. and Swagel, P. (2001).“Sources of Inflation in
Developing Countries”, IMF Working Paper:WP/01/198,
International Monetary Fund.
14. Majumder, M. A. (2006). “Inflation in Bangladesh: Supply
Side Effects”, Policy Analysis Unit, Policy Notes Series: PN
0705, Bangladesh Bank.
15. Montiel, P. (1989). “An Empirical Analysis of High Inflation
Episodes in Argentina, Brazil and Israel”, Staff Papers, 36,
pp 527-549, International Monetary Fund.
16. Mortaza, M. (2006). “Sources of Inflation in Bangladesh:
Recent Macroeconomic Experience”, Working Paper Series:
WP 0704, Bangladesh Bank.
17. Samuelson, P. and Solow, R. (1960).“Analytical Aspects of
Anti-Inflation Policy”, American Economic Review, 50 (2),
pp 177-94.
18. Sergent, T. and Wallace, N. (1981). “Some Unpleasant
Monetarist Arithmetic”, Quarterly Review, pp 15-31, Federal
Reserve Bank of Minneapolis.
19. Taslim, M. (1982). “Inflation in Bangladesh: A Reexamination
of the Structuralist-Monetarist Controversy”, The Bangladesh
Development Studies, 10 (1), pp 23-52.
20. Ulke, V. and Ergun, U. (2011). “Econometric Analysis of
Import and Inflation Relationship in Turkey between 1995
and 2010”, Journal of Economic and Social Studies, 1(2), pp
69-86.
 2014 Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah 55

APPENDIX
Table: Summary statistics of the study variables

CPI EXPORT IMPORT

Mean 94.56384 648.0893 947.0097
Median 83.68390 503.9048 848.4279
Maximum 167.2364 1871.282 1935.172
Minimum 53.92316 190.2203 336.8318
Std. Dev. 29.89864 375.2783 400.7422
Scenes 0.702692 0.935301 0.696977
Kurtosis 2.406309 3.171804 2.794660
Jarque-Bera 20.94814 31.75802 17.86747
Probability 0.000028 0.000000 0.000132
Observations 216 216 216

View publication stats