This research paper enquires about the topicality of the dependence of Bangladesh’s economy on public debt. Several authors examined the bearings of public debt and economic growth in different counties and they provided mixed results about the direction of the relation. This study is conducted to find out the causal relationship between public debt and growth from the perspective of Bangladesh’s economy, and we use export as a control variable. We excerpted annual time series data from the World Bank website (WDI), IMF, and fiscal year 1986 to 2018 data were gathered. One can treat budget deficit as the mother of public debt because the incarnation of the former usually precedents to the creation of the later. Several econometric tools have been behaved as Augmented Dickey-Fuller (ADF), Phillips – Peron (PP), Johansen co integration, Vector error correction model, and Granger casualty to explore short-run causality of public debt on growth.

Most of the previously examined studies that investigated the repercussion of the trade balance to exchange rate mutation relied on the assumption that appreciation and depreciation behave symmetrically, recently several works have been conducted using the asymmetric analysis. In this work, we exhibited a model employing the disaggregated data (bilateral) of trade balance with the USA. In our pursuit, we endeavored to disclose a phenomenon of the J curve, is this pattern present in our trade balance and exchange rate bearing? In this article, first, we checked the stationary of data set and discovered the stationary employing the Augmented Dickey-Fuller test, Phillips Peron then applying the ARDL bounds test of cointegration apropos to find out the long run co integrated equations and last of all, tried to investigate the short-run and long-run relationship among the variables, while we used the ECM (error correction model). The Toda-Yamamoto Procedure for Granger Causality in a VAR framework has been applied to detect the causal direction. In our model, we have blazoned the negative short-run rapport between the exchange rate and trade balance in the bilateral data, whereas we have remarked a discrepant bearing in the long run and we did receive the evidence of the appearance of j pattern in the relationship between exchange rate and trade balance. Dispensing the error correction model, we found domestic higher price level hinders the trade balance in the short run, did not find any evidence of foreign income stimulate the export. Toda-Yamamoto Procedure for Granger Causality reveals the unidirectional causal effect from exchange rate to trade balance of Bangladesh with the USA.

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