The Saving-Growth Nexus in Bangladesh

The paper investigates the nature of the relationship between Bangladesh’s savings (defined as gross domestic savings or GDS) and the gross domestic product or GDP using econometric methods. Annual time series data from 1980 to 2018 are used to conduct a series of prior tests leading to two key tests on the short-run and one long-run causality between these two important macroeconomic variables. The objective of the econometric analysis is to identify the direction of causality between these two macroeconomic variables. The paper’s findings suggest a unidirectional causality running from economic growth to savings in the short run. No long-run causality, however, was found in any direction under any of the tests.