Gdp of Bangladesh: Inter Dependency with Relevant Variables: a Var Model Approach

Gross domestic product (GDP) comes under the heading of National Accounts, Which is a subject in macroeconomics. This study aims at to find appropriate VAR (Vector Autoregressive) model for the variables agriculture, industry and services in multivariate time series, to check out the causality among the variables agriculture, industry, and service. In addition to data description and forecasting, here the VAR model is also used for structural inference and policy analysis. But before these we must verify the validation of the model in different time period, because a forecasting model may lose its validity and suitability as time progresses. The basic aim of this study was to check out the causality or inter dependency between the variables agriculture, industry and services on GDP of Bangladesh. Also to forecast the increasing GDP using VAR model. From the above study and estimation, VAR is an appropriate model for the GDP of Bangladesh. The author also found various measures of forecasting accuracy for the model. Author have found strong evidence of inter dependency or causality among the three underlying variable.