Index of EWU Authors - East West University

Abstract of Published Papers 2008Business and EconomicsASA University Review: Centre for Socio-Economic Research, Vol. 2 No. 1, pp. 1-8, ASAUniversity, January-June, 2008, (ISSN: 1997-6925)The Empirical Evidence of Fisher Effect in Bangladesh: A Time-SeriesApproachMd Gazi Salah Uddin*, Md. Mahmudul Alam**, Kazi Ashraful Alam***AbstractThis paper is an attempt to trace the relationship between interest rates and rates of inflationin the economy of Bangladesh. In view of this, a time series approach is considered toexamine the empirical evidence of Fisher’s Effect in the country. By applying OLS and UnitRoot test, the estimated value is used to determine the casual relationship between interestrates and inflation for the monthly sample period of August 1996 to December 2003. Theempirical results suggest that there does not exist any co-movement of inflation with interestrates and the relationship between the variables is also not significant for Bangladesh.Further, the trends indicate that the inflation premium, equal to expected inflation thatinvestors add to real-risk free rate of return, is ineffective in the Country.* School of Business, Presidency University, Dhaka, Bangladesh (Currently Senior Lecturer,Department of Business administration, East West University).Email address: gsu@ewubd.edu** Marketing Division Grameenphone Bangladesh.*** Faculty of Business, ASA University, Bangladesh.10