Bangladesh began implementing a series of trade liberalization reforms in the early 1990s in an attempt to arrest a burgeoning trade deficit, but with little effect. This may be due to trade policies based on aggregate data that ignore the individual responses of Bangladesh's main trading partners. This study estimates the bilateral price and income export and import elasticities for Bangladesh's five major trading partners. The findings indicate that the bilateral elasticity estimates not only vary in magnitude among the countries, but also differ markedly from aggregate elasticity values estimated in previous studies. This suggests that policies should he tailored to trading partners to deliver the intended outcomes.

Numerous scholars have estimated the elasticities of the import demand function in many different countries using different data sets and different economic techniques. As yet no definitive conclusions can be drawn from this empirical literature despite the importance of import demand elasticities for trade policy in developing countries. This paper seeks to contribute to the empirical literature on import demand elasticities in developing countries by considering the case of Bangladesh. In contrast to this earlier work on import demand elasticities in Bangladesh, which all used aggregate data, this paper examines the likely impacts of trade liberalization policies on the disaggregated import function in Bangladesh for the period 1973 to 2004. Our main objective is to establish whether bilateral import elasticities are significantly different between major trading partners. A secondary objective is to determine whether bilateral import elasticities are significantly different between major trading partners. A secondary objective is to determine whether trade liberalization has had any impact on the import sector in Bangladesh.

This thesis investigates the effects of fiscal and monetary policies on aggregate demand (output) in selected Asian countries. These countries have been classified into three groups. The first group comprises five SAARC economies: Bangladesh, India, Nepal, Pakistan and Sri Lanka. The second group consists of the ASEAN-5: Indonesia, Malaysia, the Philippines, Singapore and Thailand. The last group is made up of two countries: Hong Kong and Republic of Korea (hereafter Korea). The choice of these twelve countries was determined by three reasons. First, they have large populations, large resource bases, and large markets. They are also among the emerging economies in the world. Second, they are located close by in the same region. They are also integrated by trade and monetary unions. Finally, they have similar socio-economic characteristics. The time period 1974-2007 was chosen because, throughout this period, most Asian countries implemented structural reforms. ... The present thesis deals with the following research issues for each selected Asian economy. First, the influence of fiscal and monetary policies on aggregate demand (output) will be examined. Second, the relative strengths of various shocks at different time horizons will be determined. Third, the dynamic responses of output, money supply, government expenditure, the real exchange rate and the foreign interest rate to each type of internal and external shocks will be analysed. Finally, the relative effectiveness of fiscal policy and monetary policy on aggregate demand (output) for each country will be investigated. Throughout the thesis, both time series and panel data analyses techniques are utilized. In relation to the time series, specific techniques are applied to investigate the above issues. Using open IS-LM equations, the aggregate demand function is estimated as a function of real money supply, real government expenditure, the real exchange rate and the nominal foreign interest rate.

Trade liberalization policy represents an important policy instrument for developing countries. However, existing empirical literature on the impact of trade liberalization is ambiguous and this uncertainty also extends to Bangladesh economy. Various studies have sought to estimate econometrically the export demand function for Bangladesh as a means of clarifying the effects of trade liberalization in that country. Unfortunately, no recent studies have examined the liberalization effect on disaggregated exports in Bangladesh. In order to remedy this neglect, this article examines the likely impacts of trade liberalization policies on the disaggregated export function in Bangladesh for the period 1973–2004. The main purpose is to examine whether bilateral export elasticities are significantly different between major trading partners. If this is indeed the case, then different policies should be implemented rather than a single trade policy to enhance exports. A secondary objective is to establish whether trade liberalization has had any impact on the export sector in Bangladesh.