Interrelationships among three South Asian GDP: a cointegration approach

Gross domestic product (GDP) of Bangladesh, India, and Sri Lanka are analyzed to find out cointegration among these variables. Three log (GDP) series are found to be cointegrated. Statistically valid representation of the error correction model (ECM) for Bangladesh exists with a stable speed of adjustment indicates that about 40 % of any deviation from the long-run path is corrected within a year. Moreover, generalized Granger causality running from India and Sri Lanka to Bangladesh exists within this ECM. No significant ECM found for India and Sri Lanka