The Empirical Relationship between Economic Growth and Economic Freedom in Bangladesh

Abstract

The rationale of this article is to explore the relationship between 
Economic growth and Economic Freedom of Bangladesh over the timespan of 1995
2020. As it is ambiguous for Bangladesh, whether freedom leads the robust 
economic growth or growth leads to freedom, or both are jointly determined. To 
study these ambiguities, we use an appropriate ARDL method to assess the dynamics 
among variables in order to confirm the long run link between variables. Unit root 
test with various diagnostic tests empirically are performed by using the Heritage 
Foundation's index (HFI) of economic freedom and Bangladesh's per capita gross 
domestic product (GDP). Study confirms long run associationship from the bound 
test which suggests that a 1% rise in economic growth fosters economic freedom by 
0.09% in the country.