Eurasian Journal of Business and Economics

19

Authors: Mostafa ALI

This study explores the dynamic relation between economic growth and stock market depth in the presence of three more macroeconomic indicators such as exchange rate, inflation and interest rate of Bangladesh. We use Johansen and Juselius (1990) test of co-integration and Vector Error Correction Model (VECM) to detect the possible short-run and long-run causal relation among the selected economic forces. The results of the study evidence that the lagged error-correct term of GDP (i.e., the proxy of economic growth) is found statistically significant in all three models. This manifest that GDP tends to converge to its long-run equilibrium path in response to changes in its regressors. But we find a complex network of causal linkage between the variables in the short-run. The findings of this study are of particular interest and importance to policymakers, financial managers, financial analysts and investors dealing with the Bangladesh economy and the Bangladesh stock market.

22

Authors: Shahid AHMED, Saba ISMAIL

This paper examines the effect of bilateral tariff reduction in the agriculture sector between India and China. The results are evaluated in terms of welfare, output, employment and the potential trade flows between India and China using the GTAPmodel. The present study suggests that partial tariff reduction on imports of agricultural commodities between India and China may be welfare-enhancing for both India and China while complete tariff reduction on imports of agricultural commodities may have welfare loss for India, though there will be substantial welfare gains for China. The study reveals that welfare gains for China are larger in comparison to India. The study suggests that a well calculated and strategically negotiated tariff reduction in the agriculture sector may create a win-win situation for both partners. The study further argues that China should offer preferential market access to India for mutually beneficial and welfare-enhancing engagements for both countries. Finally, the study concludes that there exists a narrow scope for 'WTO-Plus' approach for India-China agriculture trade relations. India should assess all pros and cons as it has revenue loss and impact on economically marginalised 'Farming Community'.