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The economy of Bangladesh is currently going through a period of continuous budget deficit. The present data suggest that the government budget deficit, on average, is nearly 5% of the country’s GDP. This has been true since the early 2000s. To finance this deficit, governments have been borrowing largely from domestic and foreign sources resulting in inflationary pressure on one hand, and crowding out of private investments on the other. During the same period, although the economy has grown steadily at a rate of more than 6%, this growth is less than the potential. This article presents an econometric study of the impact of government budget deficits on the economic growth of Bangladesh. We conduct a time-series analysis using ordinary least squares estimation, vector error correction model, and granger causality test. The findings suggest that the government budget deficit has statistically significant negative impact on economic growth in Bangladesh. Policy implications of our findings include reestablishing the rule of law, political stability in the country, restructuring tax structure, closing tax loopholes, and harmonizing fiscal policy with monetary policy to attract additional domestic and foreign investment.

This study attempts to see whether the Feldstein-Horioka (F-H) puzzle holds when countryspecific effects are taken into account in a panel of 20 developing countries. We employ four estimation procedures, pooled, between, within (fixed effect) and random effect (RE) models. The results indicate that the puzzle does not go away even when country-specific effects are accounted for. In order to check robustness of results, estimates are also obtained from two sub-samples which produce qualitatively similar results. Overall findings contrast the results documented in Corbin (2001) and suggest that another puzzle (low correlation between savings and investment in developing countries) still remains even when country-specific effects are accounted for.

This paper is an extension of the Baland and Robinson theory of child labor efficiency which studies the problem of child labor using a two period model with a general equilibrium approach. To the original theory, we seek to incorporate a non-negative cost of education and an indicator for school quality. Our findings suggest that an increase in costs of education invariably raises the level of child labor. Furthermore, when school quality is poor, improvement in it can decrease the equilibrium level of child labor. In the welfare analysis we find that the conditions for education subsidies to be welfare-increasing suffice for a ban on child labor to be Pareto improving.

It is now widely recognised that entrepreneurship is not necessarily an individual-centric response to profitable opportunities or synonymous with business start-ups. Corporations or established firms, too, can play an entrepreneurial role. Merger is one means through which two ormore firms can augment their business power, add to their product lines, expand their market reach and achieve various economies of scale. This paper critically reviews the existing literature on the effects of industrial merger and concludes that they are not easy to measure precisely.