A Monetary Model of Inflation for Bangladesh, 1974-1985

Md. Akhtar Hossain

Abstract


A model of inflation for Bangladesh is developed and estimated
for the period 1974:2-1985 :4, in line with the monetary approach and
based on the hypothesis that any disequilibrium in the real money-market
adjusts itself through changes in the price level, but not
instantaneously. Changes in the prices oftraded gooas in the
international market, real permanent income, real money stock, one
period lagged rate of inflation, and changes in the terms of trade
between traded and non-traded goods are found to be the major
determinants of inflation in Bangladesh.

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DOI: https://doi.org/10.30541/v28i2pp.133-155

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