Aggregate Consumption Expenditure and Economic Growth: Evidence from Bangladesh
This paper attempts to investigate the relationship between aggregate consumption expenditure and economic growth of Bangladesh using the ARDL Bounds Test approach. The study reveals that consumption expenditure and GDP have a significant impact on each other. Granger non-causality test also has been carried out, and the test reveals that unidirectional causal relationship is running from aggregate consumption expenditure to GDP. Bilateral causality exists between GDP and capital investment. The findings suggest that consumption enhancing fiscal and monetary policies can also boost the economic growth in the context of Bangladesh. That’s because Bangladesh is still operating on the relatively flatter part of its long- run supply curve.
