This paper examines time series evidence to investigate the link between exports and economic growth in Bangladesh. Using quarterly data for a period from 1976 to 2003 the paper finds that industrial production and exports are cointegrated. The results of an Error Correction Model (ECM) suggest that there is a long-run unidirectional causality from exports to growth in Bangladesh.

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Using model selection techniques based on out-of-sample predictive ability criterion in a Vector Autoregression (VAR) framework, this paper empirically examines the causal relations among growth, trade, and wage inequality in Bangladesh between 1971 and 2000. There is some evidence of bi-directional causality between growth and inequality and between trade and growth. That growth causes trade and that trade causes inequality are robust results. Furthermore, evidence strongly suggests that investment is important for trade, and the terms of trade between agricultural products and manufacturing products is an important causal determinant of both growth and trade.Bangladesh, trade, trade openness, wage inequality, out-of-sample predictive ability, mean squared forecast errors,