Financial liberalization, financial development and economic growth: evidence from Bangladesh

Bangladesh started the process of financial liberalization since the late 1980’s. Like many other underdeveloped countries the consequences of financial liberalization in Bangladesh are dubious. Previous studies done in within the context of Bangladesh mostly pertain to the performance of economy and financial institutions. This study is focused on the impact of financial liberalization upon economic growth of Bangladesh, considering three proxies of financial development such as real interest rate, volume of intermediation, and efficiency of intermediation. The analysis shows that despite the extensive financial development in the post-reform period, financial and monetary variables are not fully contributing to growth.