An Empirical Evidence of Fisher Effect in Bangladesh: A Time-Series Approach

ASA University Review, (ISSN: 1997-6925), Vol. 2 No. 1, pp. 1-8, June, 2008

10 Pages Posted: 27 Mar 2017 Last revised: 3 Apr 2017

See all articles by Gazi Uddin

Gazi Uddin

Presidency University

Md. Mahmudul Alam

Universiti Utara Malaysia

Kazi Alam

ASA University Bangladesh (ASAUB)

Date Written: June 1, 2008

Abstract

This paper is an attempt to trace the relationship between interest rates and rates of inflation in the economy of Bangladesh. In view of this, a time series approach is considered to examine the empirical evidence of Fisher’s effect in the country. By applying OLS and Unit Root test, the estimated value is used to determine the casual relationship between interest rates and inflation for the monthly sample period of August 1996 to December 2003. The empirical results suggest that there does not exist any co-movement of inflation with interest rates and the relationship between the variables is also not significant for Bangladesh. Further, the trends advocate that the inflation premium, equal to expected inflation that investors add to real-risk free rate of return, is ineffective in the country.

Keywords: Interest Rate, Inflation

Suggested Citation

Uddin, Gazi and Alam, Md. Mahmudul and Alam, Kazi, An Empirical Evidence of Fisher Effect in Bangladesh: A Time-Series Approach (June 1, 2008). ASA University Review, (ISSN: 1997-6925), Vol. 2 No. 1, pp. 1-8, June, 2008 . Available at SSRN: https://ssrn.com/abstract=2940726 or http://dx.doi.org/10.2139/ssrn.2940726

Gazi Uddin

Presidency University ( email )

86/1 College Street
Kolkata, West Bengal 700073
India

Md. Mahmudul Alam (Contact Author)

Universiti Utara Malaysia ( email )

Sintok, Kedah
Malaysia

Kazi Alam

ASA University Bangladesh (ASAUB) ( email )

Shyamoli
Dhaka
Bangladesh

Register to save articles to
your library

Register

Paper statistics

Downloads
33
Abstract Views
167
PlumX Metrics