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Financial Innovation

Table 7 Short-run Dynamics Estimates

From: Financial innovation and economic growth in Bangladesh

 

Model – 1 AIC criteria

Model – 2 AIC criteria

Model – 3 AIC criteria

ECT (−1)

−0.49 (0.01)**

−0.57 (0.005)**

−0.55 (0.003)**

C

−0.086 (0.86)

−0.94 (0.048)*

0.54 (0.005)**

∆lnGDPPC (−1)

0.75 (0.01)**

0.56 (0.002)***

0.72 (0.004)***

∆ln M2 M1 (−1)

0.54 (0.01)**

  

∆lnDCB

 

0.10 (0.002)**

 

∆lnGEXP

0.081 (0.03)*

0.25 (0.03)*

0.08 (0.01)**

∆lnGCF

  

0.80 (0.03)*

∆lnCPI (−1)

−0.04 (0.6155)

−0.061 (0.42)

−0.06 (0.38)

∆lnTO (−1)

0.09 (0.018)**

0.16 (0.03)*

0.11 (0.009)**

Diagnostic Test

   

R 2

0.71

0.86

0.97

\( {F}_{statistics}^2 \)

1.51 (0.023)

10.37 (0.00)

3.80 (0.00)

\( {x}_{Autocorrelation}^2 \)

1.81 (0.40)

0.47 (0.49)

1.81 (0.43)

\( {x}_{Normality}^2 \)

1.61 (0.44)

0.28 (0.87)

1.61 (0.45)

\( {x}_{Heteroskedasticity}^2 \)

6.78 (0.45)

3.46 (0.94)

6.78 (0.47)

\( {x}_{RE\mathrm{S} ET}^2 \)

0.82 (0.27)

0.02 (0.87)

3.65 (0.24)

  1. Note: 1. CPI: Consumer Price Index, M2/M1: Broad-to-Narrow Money, GEXP: Government Expenditure, GCF: Gross Capital Formation, DCB: Domestic Credit to Private Sector, TO: Trade Openness and GDPPC: Gross Domestic Product Per Capita. Variables are positively defined (see Table 1)
  2. Note 2: Values reported () in brackets are the associated probability of coefficients
  3. Note 3: (*) & (**) significance at 5% and 1%, respectively
  4. Note 4: Values reported here are the natural logs of the variables. We use natural log forms in our estimation
  5. Note 5: Δ denotes the first order difference operator
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