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How can we double per capita incomes in Bangladesh in 15 years?

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  • O11 - Macroeconomic Analyses Of Economic Development

Abstract

This paper develops a framework to analyse the determinants of the long term growth rate of Bangladesh. It is based on the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and follows Senhadji’s (2000) growth accounting procedure to estimate total factor productivity (TFP). Our growth accounting exercise shows that growth rate in Bangladesh, until the 1990s was primarily due to factor accumulation. Since then, however, TFP has made a small positive contribution. An analysis of the determinants of TFP shows that remittances by emigrant workers has no significant long run growth effect. Using our results on the determinants of TFP we examine policy options to double per capita income of Bangladesh in about 15 years.

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