GROUP 6 - Macroeconomics Term Paper (Section B)

ROLE OF MACROECONOMICS
IN INCOME DISTRIBUTION
Bangladesh Context
TERM PAPER 2021

GROUP 6 | SECTION B
MACRO ECONOMICS
ALD 2202
In the background section we have tried to give an overview of the past state of Bangladesh in this
matter of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem
identification. Following the core issue, we have jotted down the questions that will help us approach to
a conclusion in a constructive manner. The objective of the paper is set in accordance to our research
questions.
For the literature review, we have gathered as much scholarly paper as we could to get a hold of the
work that has already been done on the stated topic. We have also tried to bring out the loopholes in the
past papers that has guided us to further breakdown our findings and literature review.
We were heavily dependent on secondary data and other research sources. We have tried to collect as
much discreet data as we could. However, we have faced resource and time constraint. Besides that, our
sample size wasn’t adequate.
For the findings section we tried to interpret the data found in your literature review. Our main focus
was to create a connection between macroeconomic management and fair income distribution. Also, we
Macro Economics Term Paper |
GROUP MEMBERS
FARHAN ISRAQ HAQUE
ID 2023011012
FAHIM SHAFAYET
ID 2023011034
TAHMID IQBAL
ID 2023011060
FAYEZA FAHMIDA
ID 2023011092
FARAH FIROZ PIU

ID 2023011094
SUBMITTED TO
Md. Kaysher Hamid
Assistant Professor
Department of BBA General
Faculty of Business Studies
Bangladesh University of Professionals (BUP)
GROUP 6 | SECTION B
COURSE: MACRO ECONOMICS
CODE: ALD 2202
Date of submission: 07.11.2021

Page | 2
LETTER OF TRANSMITTAL
questions.
08.11.2021
Md. that
work Kaysher Hamidbeen done on the stated topic. We have also tried to bring out the loopholes in the
has already
past papersProfessor
Assistant that has guided us to further breakdown our findings and literature review.
We were heavily
Department dependent
of BBA on secondary data and other research sources. We have tried to collect as
General
Bangladesh
sample University
size wasn’t of Professionals (BUP)
adequate.
Mirpur Cantonment, Mirpur, Dhaka 1216
Subject:
focused onLetter
the keyofchanges
Transmittal
and reforms already adopted in Bangladesh to fight against the obstacles
faced to fully implement fair income distribution. Furthermore, we brought down a few other burning
issues that was correlated to the core issue.
Respected Sir,
Lastly, our recommendations suggest how to better the system in a whole.
It is indeed a great pleasure for us to be able to hand over the result of our hardship of the report
on “Role
matter of Macroeconomics
of discussion. Next, we havein Income Distribution:
stated what Bangladesh
our key focus we haveThough
context”.
is. Basically, we are
done a core in
problem
identification. Following
the learning curve, thisthe core helped
report issue, we
ushave jottedkey
to gather down the questions
insights into thethat
corewill helpregarding
facts us approach
the to
importance of Macroeconomics as a front liner in determining the ultimate success of a
questions.
company
For in the review,
the literature long run.
we have gathered as much scholarly paper as we could to get a hold of the
We papers
past attempted
that our level best
has guided us tofor setting
further up this report.
breakdown The data
our findings of this report
and literature is for the most
review.
part dependent on the scholarly papers, financial reports, country economy papers, along with
otherdiscreet
much internetdata
resources. We all
as we could. gave our
However, wehundred percent
have faced for making
resource and timethis report meet
constraint. up.that, our
Besides
We fervently hope that you will be kind enough to find this plan worth reading. Please feel free
for to
was anycreate
querya connection
or clarification thatmacroeconomic
between you would likemanagement
us to explain.
andHope you will
fair income appreciateAlso,
distribution. our we
focused on the
hard work andkey changes
excuse theand reforms
minor already adopted in Bangladesh to fight against the obstacles
errors.
Sincerely,
Farhan Israq Haque Fahim Shafayet Tahmid Iqbal
ID 2023011012 ID 2023011034 ID 2023011060
Fayeza Fahmida Farah Firoz Piu

ID 2023011092 ID 2023011094
Page | 3
ACKNOWLEDGEMENT
Akiuf89fqwdiqoijNJSIACNKWHIHjknkjnxkasnfhwohoih
questions.
This is our pleasure to prepare and submit the paper on “Role of Macroeconomics in Income
Distribution: Bangladesh context”. The preparation of the paper would not have been possible
without the valuable contribution and collaboration of each of the group members.
We are grateful to our course teacher Md. Kaysher Hamid for departing us knowledge
We were heavily
regarding dependent
this topic in many onclass
secondary datathroughout
lectures and other research
the wholesources.
courseWe andhave
alsotried to collect
providing usas
such an immense opportunity. We really enjoyed the task and tried to give our full effort to our
much discreet data as we could. However, we have faced resource and time constraint. Besides that,
sampleitsize
make richwasn’t adequate. We want to give special thanks to all the associates who provided
and resourceful.
all
For the findings
company related
section information.
we tried Moreover,
to interpret we convey
the data found our heartfelt
in your literature gratitude
review. Our maintofocus
the
scholars who’s
was to create previous between
a connection researches helped us have
macroeconomic a better and
management understanding on the agenda
fair income distribution. Also, we
focused on the key changes and reforms already adopted in Bangladesh to fight against the obstacles
provided.
faced
At to but
last, fullynot
implement
the least,fair
theincome
Almightydistribution.
Allah toFurthermore,
whom we are weever
brought downina giving
grateful few other burning
us all the
opportunity and making us able to complete this paper with the utmost blessing and resource.
Department of BBA- General
Faculty of Business Studies
Bangladesh University of Professionals (BUP)
Mirpur Cantonment,
a conclusion Mirpur,manner.
in a constructive Dhaka-1216
The objective of the paper is set in accordance to our research
questions.
Page | 4
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................................ 8
1.0 Background ....................................................................................................................................... 9
1.1 Introduction .............................................................................................................................. 10
1.2 Statement of the Problem .............................................................................................................. 10
1.3 Significance of the Study ................................................................................................................. 10
1.4 Objective of the Study..................................................................................................................... 10
1.5 Research Question .......................................................................................................................... 11
1.6 REVIEW OF LITERATURE .................................................................................................................. 11
1.6.1 Theoretical & Empirical Literatures ......................................................................................... 11
Capital Market Imperfection & Income Distribution .................................................................... 12
Inequality & Development Theory ................................................................................................ 12
Effects of Trade Liberalization on Income Distribution ................................................................ 12
Income distribution & Tax............................................................................................................. 13
1.6.2 Research Gap ........................................................................................................................... 14
1.7 RESEARCH METHODOLOGY ............................................................................................................ 15
1.7.1 Research Design ....................................................................................................................... 15
1.7.2 Sources & Collections of Data .................................................................................................. 15
1.8 Limitations....................................................................................................................................... 15
1.9 Report Preview................................................................................................................................ 16
2.0 MACROECONOMIC MANAGEMENT................................................................................................ 16
2.1 Bangladesh's Development Has Been Characterized by Prudent Macroeconomic Management
.......................................................................................................................................................... 16
2.2 Economic Growth........................................................................................................................ 17
2.3 Per Capita GNI ............................................................................................................................. 18
2.4 Fiscal Management ..................................................................................................................... 18
3.0 Key Changes & Reforms Adopted ................................................................................................... 19
3.1 The Planning Procedure & Measures Undertaken to Enhance Domestic Resource Mobilization
.......................................................................................................................................................... 19
3.2 Reforms Undertaken & Ongoing................................................................................................. 19
3.2.1 Implementation of New VAT Law ........................................................................................ 19
3.2.2 Automation of VAT Systems ................................................................................................ 19
3.2.3 Introduction of Electronic Fiscal Device ............................................................................... 19
3.2.4 Enactment of New Customs Law ......................................................................................... 19
3.2.5 Upgrading Customs Automated System .............................................................................. 19
3.2.6 Simplifying Tax Procedures .................................................................................................. 19
Page | 5
3.2.7 Programs to Expand the Number of Taxpayers ................................................................... 19

3.2.8 Discouraging Tax Exemptions .............................................................................................. 20
3.2.9 Introducing ADR to Resolve Revenue Disputes ................................................................... 20
3.2.10 National Savings Certificate (NSC) Digitalization ............................................................... 20
3.2.11 Surplus funds from SOEs .................................................................................................... 20
3.2.12 Introduction of Sukuk Bond ............................................................................................... 20
3.3 Planned Reforms ......................................................................................................................... 20
3.3.1 Adoption of a New Customs Law ......................................................................................... 20
3.3.2 Creating a New Tax Code ..................................................................................................... 20
3.3.3 Automating the TIN Registration Process ............................................................................ 20
3.3.4 Revenue Management Integrated ....................................................................................... 20
3.3.5 Automating Customs Bond Management ........................................................................... 20
3.3.6 Scan All Trade Consignments ............................................................................................... 20
3.4 Monetary Policy & Monetary Management ............................................................................... 21
4.0 Findings ........................................................................................................................................... 21
4.1 Utilizing monetary policy to ensure economic liquidity in the aftermath of COVID-19 ............. 21
4.2 Making Progress on Poverty and Income Inequality .................................................................. 22
4.3 Bangladesh's key determinants of poverty reduction are as follows ......................................... 22
4.3.1 GDP Expansion ..................................................................................................................... 22
4.3.2 Growth in Employment, Labor Productivity & Real Wages ................................................. 23
4.3.3 Remittances ......................................................................................................................... 23
4.3.4 Expansion of Microcredit ..................................................................................................... 23
4.3.5 Income Equality.................................................................................................................... 23
5.0 Recommendations .......................................................................................................................... 24
5.1 No One-Size-Fits-All .................................................................................................................... 25
5.2 Equitably Balancing Equity and Efficiency Concerns................................................................... 25
5.3 Fiscal Policy Can Be a Powerful Tool in the Fight Against Inequality .......................................... 25
5.4 Educational Policies Are Critical .................................................................................................. 25
5.5 Fostering Financial Inclusion Safely ............................................................................................ 26
5.6 Labor Market Policies and Institutions that are well-designed can help reduce inequality while
without impeding efficiency. ............................................................................................................ 26
5.7 Making Labor Markets More Inclusive and Creating Incentives to Reduce Informality is A
Critical Challenge in EMDCS .............................................................................................................. 27
5.8 Compatibility of Growth and Income Equality Objectives .......................................................... 27
6.0 References ...................................................................................................................................... 29
Page | 6
LIST
matter OF FIGURES
of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem
Figure 3.1: Inflation Rate (%), FY 2009- FY 2020……………………………………. 21
Figure 4.1: Comparison of poverty rate and extreme poverty rate along the years 2005
questions.
– 2019…………………………………………………………………………………… 22
ForFigure
the literature review, we
4.2: Evolution of have gathered
Average as much
Income, scholarly paper
Bangladesh, as we could to get a hold of the
2000-2020…………………… 24
LIST OF TABLES
ForTable 2.1: Key

the findings Macroeconomic
section Indicators,
we tried to interpret FY 2009-2020…………………………….
the data 17
found in your literature review. Our main focus
wasTable 2.2: aGDP
to create Growth,
connection Per Capita
between GDP Growth,
macroeconomic and Per Capita
management and fairGNI………………. 18 we
income distribution. Also,
LIST OF ABBREVIATIONS
Alternative Dispute Resolution (ADR)
Advance-Deposit
matter Ratiowe
of discussion. Next, (ADR)
have stated what our key focus is. Basically, we have done a core problem
Automated Following
identification. System fortheCustoms Data
core issue, we (ASYCUDA)
have jotted down the questions that will help us approach to
Development
a conclusion Results Framework
in a constructive (DRF)
manner. The objective of the paper is set in accordance to our research
Electronic Fiscal Devices (EFDs)
questions.
Economically More Developed Countries (EMDCs)
Foreign
work Direct
that has Investment
already (FDI)
been done on the stated topic. We have also tried to bring out the loopholes in the
FYP (Five Year Plan),
Fiscal Year (FY)
WeGross
were Domestic
heavily dependent
Product on secondary data and other research sources. We have tried to collect as
(GDP)
Gross National Income (GNI).
Investment-Deposit Ratio (IDR)
ForInternational
the findings section we tried
Monetary Fundto(IMF)
interpret the data found in your literature review. Our main focus
was to create
Lower a connection Nation
Middle-Income between(LMIC)
macroeconomic management and fair income distribution. Also, we
focused on the key changes and reforms
Millennium Development Goals (MDGs) already adopted in Bangladesh to fight against the obstacles
faced to fully implement
Microcredit fairAuthority
Regulatory income distribution.
(MRA) Furthermore, we brought down a few other burning
Money Flow Indexes (MFIs)
Lastly, our recommendations
National Savings Certificate suggest
(NSC)how to better the system in a whole.
Official Development Assistance (ODA)
Ordinary Least Squares (OLS)
Ready Made Garments (RMG)
Sustainable Developmental Goals (SDG)
Upper Middle-Income Country (UMIC)
Value Added Tax (VAT)
VAT online Project (VoP)
Page | 7
identification. Following the core issue, we have jottedSUMMARY
EXECUTIVE down the questions that will help us approach to
questions.
ForWealth distribution
the literature review, has beengathered
we have one ofasthe main
much concerns
scholarly paperofasevery country
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hold of
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done on cannot really
the stated topic.beWeexpected
have alsoby only
tried increasing
to bring out theproduction
loopholes ini.e
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past papers thatAlong
efficiency. has guided
with us to furtherproper
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and our findings
equal and literature
distribution review.
of wealth can accelerate an
economy towards growth and enhancement. A proper balance between efficiency and equality
candiscreet
much assist indata
economic growth.
as we could. This paper
However, wasfaced
we have prepared withand
resource a view to thoroughly
time constraint. analyse
Besides that,the
our
rolessize
sample of wasn’t
macroeconomics
adequate. in income distribution. The paper focuses on the macroeconomic
concepts which influence the income distribution of a country. The findings give an overview
of the economic condition including GDP, national income, budgets, inflation rate, net exports,
currency exchange rate etc of Bangladesh from the fiscal years 2009-2010 to 2019-2020; i.e. a
decade’s data has been presented.
Due to the pandemic, businesses came to a standstill and the world economy greatly suffered.
Lastly,
Theour recommendations
impacts suggest
of COVID-19 on thehow to better
economy arethe systemthrough
analysed in a whole.
the data provided in the paper.
A brief
In the insight section
background of the development programmes
we have tried to to ensure
give an overview of theequality hasofalso
past state been stated
Bangladesh in this
in this
study.
matter Effects of Next,
of discussion. poverty and unemployment
we have on income
stated what our key distribution,
focus is. Basically, monetary
we have done apolicies and
core problem
identification.
reforms and Following the core
their degree of issue, we have jotted
effectiveness are alsodown the questions
discussed. The that
paperwillconcludes
help us approach to
with the
a conclusion
limitationsin of
a constructive manner.
existing policies andThe objectiveinofdifferent
loopholes the paper is set inalong
reforms accordance to our research
with recommendations
questions.
on how the current situation can be improved in order to maintain equilibrium in the society
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and literature review. distribution in
Bangladesh and how effective different policies and programmes are and ways to improve the
current
much situation
discreet data asinwe
this regard.
could. However, we have faced resource and time constraint. Besides that, our
Page | 8
1.0 Background
Bangladesh has achieved remarkable economic growth over the years, but the country's
growing socioeconomic inequality remains a source of concern. Bangladesh is forecasted by
questions.
the World Bank to be one of the world's top three fastest-growing economies by 2022, but such
For the literature
inequality review,distribution
in income we have gathered as much
between scholarly
individuals alsopaper as we could to get a hold of the
surges.
Since 1972, income inequality has been at an all-time high in our country. According to studies,
Welow-income
were heavily families are on
dependent struggling
secondary todata
make
andends
othermeet or eat
research three square
sources. We havemeals every
tried to day.
collect as
much discreettodata
According as wedistribution
income could. However, we have
studies, facedofresource
the gains andadvancement
economic time constraint. Besides
have that,upour
trickled
sample
rathersize wasn’t
than adequate.
trickled down. Economists have been increasingly concerned about such
discrepancies
For in income.
the findings section Bangladesh
we tried to interpretisthe
ranked 133rdinon
data found theliterature
your current review.
HumanOur Development
main focus
Index, out of 189 countries.
The to
faced income share of the
fully implement fair bottom 40% of persons
income distribution. is roughly
Furthermore, we21%,
brought while
down thea few
richest 10%
other earn
burning
issues that27%.
around was correlated
Bangladeshto the corealso
Bank issue.expressed grave concern that the second wave of the
pandemic and subsequent lockdowns could severly hinder economic progress and further
disperse income distribution throughout the country.
matter of discussion.
In Bangladesh, Next,gap
income we appears
have stated what
to be our keyatfocus
widening is. Basically,
an alarming rate.we
A have
smalldone a core
sector problem
of society
disproportionately benefits from the country's prosperity, depriving the remainder. The top
10%'s income share increased from 21% in 1984 to 27% in 2010. The poorest 10%'s income
questions.
share decreased from 4.13 percent to 3.99 percent. 2021) (Financial Express).
work that has
In 1971, already
about 90%been done on the stated
of Bangladeshis lived topic. We have
in villages; also tried
today, to 70%
nearly bring do.
out the loopholes
Cities in the
are likely
past papers
to see that has guided
an increase us to further
in population. The breakdown
capital cityour findings
now and literature
accounts for 10% ofreview.
the population, up
from
We 2%
were in 1980.
heavily Due toona secondary
dependent lack of decentralization, spatial sources.
data and other research inequality
Wein income
have wages
tried to collecthas
as
much discreet
grown. Dhaka data
andasChittagong
we could. However,
residentsweearn
havemore
facedthan
resource
thoseand
whotime
liveconstraint.
elsewhere.Besides that, our
Asthe
For a result,
findingspoverty
sectionreduction has
we tried to progressed
interpret slowly,
the data while
found disparities
in your literature have increased.
review. In focus
Our main recent
years,
was publica connection
to create spending on education
between and health management
macroeconomic has decreasedand asfair
a percentage of GDP. Also,
income distribution. Suchwe
low investment
focused on the keydoes not assist
changes workers
and reforms to improve
already adoptedtheir output andto
in Bangladesh is fight
incompatible
against thewith efforts
obstacles
to eliminate
faced poverty fair
to fully implement andincome
inequities. The impoverished
distribution. Furthermore, we cannot
broughtbenefit
down afrom government
few other burning
issues that was
privileges correlated
such to theloan
as bailouts, corerescheduling,
issue. tax exemptions, subsidies, and licenses. Social
safety programs fall far short of addressing poverty and geographical inequality.
The goal of this paper is to highlight how income is poorly distributed within the economy of
Bangladesh and the role that macroeconomics could play in helping to reduce income
inequality in the context of Bangladesh.
Page | 9
1.1 Introduction
One of the Following
identification. very firstthe
principles
core issue,ofwemacroeconomics
have jotted downisthethat peoplethat
questions facewilltradeoffs. Tradeoffto
help us approach
a conclusion in a constructive manner. The objective of the paper is set in accordance to
means exchange of something of value in lieu of something else which is equally or sometimes our research
questions.
more valuable. Every economy faces tradeoffs. Government works relentlessly to allocate the
Fornation’s resources
the literature equally
review, but gathered
we have the existence of tradeoff
as much scholarlyalways
paper asremains.
we could to get a hold of the
The
past biggest
papers thatand
hasmost thought
guided of tradeoff
us to further for any
breakdown oureconomy would
findings and be Efficiency
literature review. Vs. Equality.
For economic growth efficiency is necessary but we cannot ignore equality because ‘economic
growth’ does not only refer to just an increase in production but also refers to the overall
improvement
sample inadequate.
size wasn’t the national income.
ForThe
the father
findingsofsection we tried
economy Adam to interpret
Smith’s the data found
concept in your
of taxing literatureofreview.
a portion Our main
the rich’s focus
wealth and
was to create a connection between macroeconomic management and fair income distribution.
equally distributing it too much needier population is nothing less than revolutionary. He Also, we
believed that in a market economy, wealth would be produced and distributed by an "invisible
hand" process or price system. However, in the actual world, an economy encounters
significant constraints and challenges that impede equitable income distribution. As a result,
Lastly, our recommendations
government involvement suggest how to better
is occasionally the system in a whole.
essential.
In this
matter paper we Next,
of discussion. discuss the roles
we have statedofwhat
macroeconomics
our key focus is.in incomewedistribution
Basically, have done abycorekeeping
problem
Bangladesh’s
identification. contextthe
Following in core
mindissue,
and look at few
we have jotted down the questions that will help us approach to
questions.
1.2 Statement of the Problem
The paper focuses on different concepts of macroeconomics and their limitations in regards to
equal
past distribution
papers of wealth.
that has guided us toMoreover, the paperour
further breakdown was writtenand
findings to literature
study various barriers to proper
review.
income distribution in Bangladesh.
WeAkiuf89fqwdiqoijNJSIACNKWHIHjknkjnxkasnfhwohoih
were heavily dependent on secondary data and other research sources. We have tried to collect as
1.3 Significance of the Study
ForThe
the paper
findingshighlights
section wedifferent aspects the
tried to interpret regarding income
data found in yourdistribution in anOur
literature review. economy. The
main focus
wassignificance of the studybetween
to create a connection is mentioned below- management and fair income distribution. Also, we
macroeconomic
focused • onInsights
the key on
changes
wealthand reforms already
distribution adopted macroeconomics
and relevant in Bangladesh to fight against the obstacles
theory
faced to• fully implement
Roles fair income distribution.
of macroeconomics Furthermore,
in balancing the incomewe brought down a few other burning
equilibrium
issues •thatResource
was correlated to the core issue.
allocation and income distribution analysis of Bangladesh
Lastly,•ourExternalities affecting
recommendations smooth
suggest income
how to better distribution
the system in a whole.
1.4 Objective of the Study

This paper was written with certain objectives in mind. These are-
• Highlighting the roles of macroeconomics in income distribution
• Providing a picture of income distribution in the context of Bangladesh
• Effects of poverty on income distribution
• Reviewing existing monetary policies and reforms
Page | 10
1.5 Research
matter Question
of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem
The paper wasFollowing
identification. preparedthe
with a view
core issue,to
wefinding the answers
have jotted down thetoquestions
the following question:
that will help us approach to
questions.
1. What are the roles of macroeconomics in income distribution?
2. Which concepts of macroeconomics influence income distribution in Bangladesh?
work3.that
Howhashas the economy
already been doneofonBangladesh performed
the stated topic. since
We have alsothe lasttodecade?
tried bring out the loopholes in the
4. What is the current economic condition of the country?
5. What initiatives have the government taken to ensure equal distribution of wealth?
6. What are the limitations of existing policies?
7. What should be done in order to ensure proper and better income distribution in
Bangladesh?
facedREVIEW
1.6 to fully implement fair income distribution. Furthermore, we brought down a few other burning
OF LITERATURE
Lastly,Theoretical
1.6.1 our recommendations suggest Literatures
& Empirical how to better the system in a whole.
The overall
matter growth Next,
of discussion. of theweeconomy
have statedis what
not the
ouronly metric
key focus to mitigate
is. Basically, we the
havepoverty inside
done a core a
problem
country because
identification. worsening
Following the distribution
the core issue, we haveof jotted
income in anthe
down economy
questions can aggravate
that will helpthe poverty to
us approach
inside the country.
a conclusion (Datt andmanner.
in a constructive Ravallion
The1992 and of
objective Kakwani
the paper 1993).
is set According
in accordance to to
Bourguignon
our research
(2004) and Iqbal (2003), the growth aspect of an economy depends on the role of human
questions.
capital.
Emphasizing
past papers that in has
human capital
guided us tocreates
furtherexternalities
breakdown our andfindings
economies of scale review.
and literature that results in rapid
productivity growth and the rise of equality in an economy. In order to reduce poverty in a
We wereinheavily
country dependent
a reasonable on secondary
time, data and
the distribution of other
income research
needssources. We have tried
to be improved. to collect as
Bourguignon
(2004) shows a hypothetical situation where the per capita income rises 3 percent without any
change to the distribution of income, then at least 7 percent of the people will pass the poverty
For the
level in findings
the nextsection we tried to interpret the data found in your literature review. Our main focus
10 years.
focusedexpenditure
Public on the key changes and reforms already
is a macroeconomic factor adopted in Bangladesh
to determine the overall to economic
fight against the obstacles
condition. An
faced to fully implement fair income distribution. Furthermore, we brought down
increase in public expenditure puts a positive effect on the economy by increasing aggregate a few other burning
demand and overall productivity, which eventually results in a higher level of employment and
Lastly, our
wages. recommendations
Higher wages reducesuggest
povertyhow to better
to the the system
poor portion in aeconomy
of the whole. because these policies
favor the poor. (Hassan, 2007)
But in the Bangladesh economy public expenditures don't play a significant role to reduce
income inequality & poverty. Bangladesh significantly increased their public expenditure in
the last 20 years. Key sectors of public expenditures such as education, health, infrastructure
building, power and energy, agriculture and rural development indicate inefficiencies and a
number of structural issues. Public expenditures in these sectors have been highly inefficient
& biased towards the non-poor portion of the economy. (MI Hossain 2014)
Page | 11
Microfinance organizations have a significant impact on lowering income inequality. Money
Flow Indices (MFIs) increase household income and general spending in the economy, while
aalso reducing
conclusion in aincome inequality
constructive andThe
manner. improving
objective welfare. Thisis demonstrates
of the paper thattomicrofinance
set in accordance our research
is a viable
questions. development method with significant policy implications for poverty reduction,
income distribution, and the accomplishment of the Millennium Development Goals (MDGs).
(Rubana Mahjabeen, 2008)
Capital Market Imperfection & Income Distribution
We were heavily
In 1998, dependent
economists Odedon secondary
Galor data and
and Joseph other
Zeira research
in their sources.
working We“Income
paper have tried to collect as
Distribution
much
and Macroeconomics” mentioned how Capital market imperfections associated that,
discreet data as we could. However, we have faced resource and time constraint. Besides withour
enforcement costs results in a higher rate of interest for borrowers than for lenders. Skills are
limited
For amongsection
the findings the portion
we tried of the population
to interpret with in
the data found a your
sufficiently
literaturehigh level
review. Our of
main wealth.
focus
was to create a connection
Consequently, between
the aggregate levelmacroeconomic
of skilled and management and fair
unskilled labour can income distribution.
be determined fromAlso,
the we
focused on theofkey
distribution changes
wealth. From andthis,
reforms already adopted
the aggregate outputincan
Bangladesh to fight against the obstacles
be determined.
faced to fully implement fair income distribution.
Akiuf89fqwdiqoijNJSIACNKWHIHjknkjnxkasnfhwohoih Furthermore, we brought down a few other burning
issues
Even that was correlated
though, in the shorttorun
the there
core issue.
might be a positive relation between economic growth and
inequality
Lastly, but in the long run,
our recommendations higher
suggest howinequality
to better is
themore likely
system in a to hamper the economic growth
whole.
in the country. Due to higher interest rates for borrowers, the poorer population of the nation
becomes unable to borrow money from lenders for lack of collateral in situations of credit
market imperfections.
Inequality & Development Theory
questions.
Economist Simon Smith Kuznet, a Nobel prize winner in economic sciences, in his early
studies suggested that income inequality is more during the initial stages of development and
gradually decreases in the course of development (1995). However, it was a fairly controversial
theory but few more economists like Summers, Karvis and Heston (1984) confirmed the theory
We were
using heavily of
analysis dependent on secondary
time patterns data and
of inequality otherdifferent
across research sources. WeBut,
countries. havedue
triedtotoOrdinary
collect as
much
Leastdiscreet
Squaresdata as we
(OLS) could. However,
estimation we have
technique therefaced
was aresource
problemand
of time constraint.
omitted variableBesides that, our
bias. Using
data of 108 countries, Deininger and Squire (1996) observed no consistent association between
growth
For and aggregate
the findings inequality
section we changes.the data found in your literature review. Our main focus
tried to interpret
focused
Effectsonofthe key changes
Trade and reforms
Liberalization already adopted
on Income in Bangladesh to fight against the obstacles
Distribution
faced
TradetoLiberalization
fully implementisfair income
another distribution.
factor Furthermore,
that might contribute we brought
to the down growth
economic a few other
of a burning
nation.
Studies on trade Liberalization have found a positive relationship between trade liberalization
and economic
Lastly, growth. Early
our recommendations studies
suggest howintothe 90s the
better by system
prominent economists like Dollar (1992),
in a whole.
Edwards (1993), Sachs and Warner (1995) and Dollar and Kraay (2001) show how with the
increase of trade liberalization, the economy of a country has a considerably positive effect.
Trade encourages countries to produce goods and services in areas where they have a cost
advantage over other economies. These locally produced goods can be distributed among
citizens and also exported to foreign countries. Bangladesh for example produces readymade
garments and holds the third position in Ready Made Garments (RMG) export. The revenues
from this are later on invested into capital goods and services and thus the economy grows.
Page | 12
Moreover, trade alsoNext, we have stated
contributes to thewhat our key focus
employment of is.
theBasically,
nation. we havemore
When done aand
coremore
problem
identification.
products Followingare
and services theexpanded,
core issue, the
we have
needjotted down the
for workers questions
also thatAs
increases. willahelp us approach
result, a lot of to
doors for employment are opened. Studies on Trade Liberalization by Hiranya and Abdullah
questions.
(2004) found similar results i.e. trade liberalization accelerating growth in Bangladesh and
For thelittle
found literature review,
evidence we havedistribution
of income gathered as much scholarly
affecting growthpaper as we could to get a hold of the
or investment.
past papers Mustaq
Economist that has Khan
guided(2020)
us to further
while breakdown our findings
analysing data and literature
of five south review. from 1990-
asian countries
2016
We werefound evidence
heavily of a decline
dependent in income
on secondary datainequality and tradesources.
and other research liberalization.
We haveHe alsotoblamed
tried collect as
an
muchincrease
discreetin data
secondary education
as we could. for the
However, we disparity
have facedbetween
resourceskilled
and timeandconstraint.
unskilledBesides
labor. that,
Due our
sample
to size wasn’t
Foreign Direct adequate.
Investment (FDI), the demand for skilled workers increases drastically.
People receiving more education grab these opportunities and increase their income in the
process leaving
was to create an imbalance
a connection between in macroeconomic
the income levels of skilledand
management andfairunskilled labor. DueAlso,
income distribution. to we
increase
focused on in the
exports, greaterand
key changes openness
reformstoalready
trade can generate
adopted lower inequality.
in Bangladesh However,
to fight against Arif &
the obstacles
Saeduzzaman (2015) challenged
faced to fully implement fair incomethe conventional
distribution. theory and
Furthermore, weshowed
broughtstrong
down aevidence
few otherthat by
burning
pulling
issues thatsupply too muchto Bangladesh
was correlated the core issue.trade reduces income of labour and the remittance
influences inequality in a negative way.
A sensitivity analysis by Nath and Al Mamun (2004) showed that employment opportunities
In thecreated
were backgrounddue tosection
importweof have
rawtried to givecreating
materials an overview
newofsectors
the past
in state of Bangladesh in this
the country.
Income distribution & Tax
Tax and transfer programmes are usually tools to redistribute income under government rules
questions.
and regulations. Tax regulations are imposed in order to bring equity within the income levels
Forthe
in theeconomy.
literature review,
However,we have gathered
studies show as much
that scholarly
in most paper as we
developing could to tax
countries' get and
a hold of the
transfer
work that hasare
programmes already
not asbeen done on
effective asthe stated
those topic. We have
in industrial also tried
countries. to bring out
Developing the loopholes
countries' lack ofin the
past papers that
redistributive has guided us
programmes to further
result breakdown
in ineffective our findings
income and literature
distribution review.
even after tax imposition.
These
We were countries usually lack
heavily dependent onasecondary
post-tax,data
post-transfer
and other equality compared
research sources. Wetohave
thattried
of developed
to collect as
countries.
much discreetMany dataeconomists
as we could.have researched
However, we havethe effective
faced resource redistribution effectsBesides
and time constraint. of tax that,
and our
found evidence of it being minor compared to industrial nations. Indirect taxes with only a
limited menu of capital and wealth taxes usually dominate the tax structure of developing
countries
was to createmaking the whole
a connection process
between ineffective. Moreover,
macroeconomic management corruption and weak
and fair income governance
distribution. Also, we
also weaken
focused on thethe effectiveness
key changes and of the tax
reforms policies
already in theinfirst
adopted place. The
Bangladesh rich against
to fight becomethe richer and
obstacles
the poor
faced become
to fully poorer.fair income distribution. Furthermore, we brought down a few other burning
implement
Education programmes initiated by the government often turn out ineffective as well.
Government takes tax from people to invest in the public and secondary education of the future
generation. However, due to ineffective education programmes, most of the cash ends up in
the teachers’ pockets rather than in the benefit of the children. Limited equity objectives of the
tax reform can even improve income distribution as seen in Jamaica and Indonesia. Hence,
objectives to balance the equity and efficiency cannot totally be put on tax and transfer
programmes. Tax instruments are used to somehow manage income distribution; but in most
cases, e.g in Bangladesh's perspective, it is however ineffective most of the times.
Page | 13
1.6.2 Research Gap
Despite our extensive research in reviewing the literature for our topic, gaps in the research
literature stillinexist.
a conclusion We havemanner.
a constructive identified
Thefour majorofgaps
objective in theis literature
the paper that require
set in accordance to ourfurther
research
research.
questions.
1. There is a lack of longitudinal research. Studies on the unequal distribution of income
in Bangladesh and the role of macroeconomics in it have not been adequately examined
and researched in the past. We need to know more about how income has been
We were heavily dependent
distributed on secondary
in Bangladesh datayears
over the and other research
and what sources.
factors We havewere
or criteria tried to collect
used to as
much discreet
distribute income within an economy. Some research suggests that income distribution our
data as we could. However, we have faced resource and time constraint. Besides that,
sampleinsize wasn’t adequate.
Bangladesh has been fairly stable after the liberation war in 1971; however, not
For theenough
findingspapers
sectionwere published
we tried to back
to interpret theup
datathefound
claim. We need
in your longitudinal
literature studies
review. Our mainthat
focus
was tospan
createover at least 30between
a connection years tomacroeconomic
properly address and understand
management and fairthe changes
income in income
distribution. Also, we
focused on the key and
distribution changes and reforms
the role already adopted
of macroeconomics in Bangladesh
in the context of to fight against the obstacles
Bangladesh.
issues that was
2. The fieldcorrelated
needs moreto the core issue.research. Although research on income distribution
intervention
Lastly, in
ourBangladesh can be found,
recommendations suggestinterventional studies
how to better the to reduce
system the unequal distribution of
in a whole.
income remain relatively rare. Some intervention strategies are targeted at the
individual level i.e. how to increase the average salary of garments workers according
to the inflation rate - while others take a whole-economy approach i.e. how to increase
overallinemployment
a conclusion a constructivethrough
manner.government investments.
The objective of the paperWe need
is set more research
in accordance to ouronresearch
both
types of intervention that utilize the best principles of intervention research.
questions.
For3.theThere
literature
is a review,
need forwemore
haveresearch
gatheredthat
as much
takesscholarly paper
a unified as we could
approach. to get
Enough a hold of
research the
was
made over the past decade to show that the problem of unequal distribution of income
exists within the Bangladesh economy. However, the problem with that research is that
We were heavily
each used dependent on secondary
their own method data and other
of estimations. research
There was nosources. Wenor
standard have
anytried to collect
criteria for as
much discreet data as we
the estimations could.
used However,
in those we have
reports, faceditresource
making difficultand time constraint.
to compare Besidesdata
the research that, our
sampleand
sizemake
wasn’t adequate.
solid assumptions.
For theAkiuf89fqwdiqoijNJSIACNKWHIHjknkjnxkasnfhwohoih
findings section we tried to interpret the data found in your literature review. Our main focus
was to create a the
4. Lastly, contextual
connection factors
between that affectmanagement
macroeconomic the unequalanddistribution of income Also,
fair income distribution. in we
focused on the key changes
Bangladesh and reforms
need greater already
attention. Thereadopted in Bangladesh
are many to impact
factors that fight against the obstacles
the distribution
faced to
of fully implement
income fair income
in Bangladesh distribution.
such as level Furthermore, we brought
of unemployment, downofa few
the ratio other burning
the number of
issues people
that wasincorrelated to class,
each social the core
theissue.
average living standard of the people, etc, however, very
Lastly, little is known about the
our recommendations effects
suggest howoftochanges in these
better the systemfactors on the unequal distribution
in a whole.
of income in Bangladesh.
Page | 14
1.7 RESEARCH
matter of discussion. METHODOLOGY
Next, we have stated what our key focus is. Basically, we have done a core problem
1.7.1 Research Design
questions.
The report is written in a descriptive style. The collection of information for this study is
For thetoliterature
critical review, we
its preparation. have gathered
Secondary as muchwere
data sources scholarly paper used
primarily as wetocould to get
get the a hold of the
information
work that has
for this report. already been done on the stated topic. We have also tried to bring out the loopholes in the
1.7.2 Sources
We were &dependent
heavily Collections of Data data and other research sources. We have tried to collect as
on secondary
much
This discreet
report data as
is based onwe could. However,
information we have
gathered fromfaced resource
secondary and time
sources constraint.
of data, and it Besides that, our
is written
insample size wasn’t adequate.
plain English.
was• toSecondary Sources between macroeconomic management and fair income distribution. Also, we
create a connection
• Research
focused on the keyPapers
changes and reforms already adopted in Bangladesh to fight against the obstacles
• Research Journalsfair income distribution. Furthermore, we brought down a few other burning
issues that was Sources
• Internet correlated to the core issue.
• Government
Lastly, Websitessuggest how to better the system in a whole.
our recommendations
• National Records
1.8 Limitations
Without a
questions. doubt, our research has limits, which is natural. However, it is crucial that we strive
to keep the range of scope limits as small as possible during the research process. Additionally,
weForwere
the literature
candid inreview, we have of
our admission gathered as much
our research scholarly paper
limitations in theasconclusions
we could to chapter.
get a hold of the
The limitations that we have are-
We• wereAims heavily
anddependent
Objectives onofsecondary data and other research sources. We have tried to collect as
the Research
much discreet
We havedata as webroadened
overly could. However, we have
the scope faced
of our resource
study aims and
and time constraint.
objectives. WeBesides that, our
may have
sampleexplained
size wasn’thow
adequate.
the formulation of research aims and objectives was restricted in order
For thetofindings
raise the study's
section welevel
tried of focus. the data found in your literature review. Our main focus
to interpret
was• toMethod
create a connection between macroeconomic
of Data Collection Implementation management and fair income distribution. Also, we
focused on the key changes and reforms already
Our research is based on old data so it might not adopted in Bangladesh
be relevanttoto
fight against
current the obstacles
context. We
faced to fully implement fair income distribution. Furthermore, we brought down
collected our data from secondary sources hence all our data might not be accurate. a few other burning
issues that was Size
• Sample correlated to the core issue.
Lastly, Sample size depends on

our recommendations the nature
suggest how to ofbetter
the research problem.
the system If we could input more data
in a whole.
in our paper then we could have had a near to close result.
• Lack of Previous Studies in the Research Area
We didn’t find a ton lot of studies that accurately covered or addressed the research
topic and hence it was tough for us to draw the actual results of research accurate. Thus,
here remains a big limitation.
• Timing of Study
The timing of study was also considered as a limitation here since we conducted the
research following very old data.
Page | 15
It is always Next,
preferable towe have stated
discover what our key focus
and acknowledge flawsis.inBasically,
your work we have
than done a core
to allow problem
them to
be brought out by your dissertation examiner. While discussing the limitations of our research,
we did not just present a list and description of our work's flaws. Additionally, we discussed
questions.
how these restrictions impacted our research findings.
work that has already
1.9 Report Previewbeen done on the stated topic. We have also tried to bring out the loopholes in the
past papers
In the that has guided
background sectionuswetohave
further breakdown
tried ouroverview
to give an findings and literature
of the review.
past state of Bangladesh in
thiswere
We matter of discussion.
heavily dependent Next, we havedata
on secondary stated
andwhat
otherour key focus
research is. Basically,
sources. we have
We have tried doneas
to collect
a corediscreet
much problem identification.
data Followingwethe
as we could. However, core
have issue,
faced we have
resource andjotted
time down the questions
constraint. thatour
Besides that,
will help
sample sizeus approach
wasn’t to a conclusion in a constructive manner. The objective of the paper is
adequate.
set in accordance to our research questions.
was
Fortothecreate a connection
literature review,between
we havemacroeconomic
gathered as much management
scholarlyand fairas
paper income distribution.
we could to get a Also,
hold we
focused on thethat
of the work keyhas
changes
alreadyandbeen
reforms already
done on theadopted in Bangladesh
stated topic. We have toalso
fighttried
against
to the obstacles
bring out the
faced to fully implement fair income distribution. Furthermore, we brought down a few other
loopholes in the past papers that has guided us to further breakdown our findings and literature burning
review.
We were heavily dependent on secondary data and other research sources. We have tried to
Incollect
the background
as muchsection we data
discreet have tried
as we to give an overview
could. However,of we
the past
havestate of Bangladesh
faced in this
resource and time
constraint.
matter Besides Next,
of discussion. that, our sample
we have sizewhat
stated wasn’t
ouradequate.
key focus is. Basically, we have done a core problem
aFor the findings
conclusion section we manner.
in a constructive tried to interpret the data
The objective found
of the paperinisyour
set inliterature review.
accordance to ourOur main
research
focus was to create a connection between macroeconomic management and fair income
questions.
distribution. Also, we focused on the key changes and reforms already adopted in Bangladesh
to fight against the obstacles faced to fully implement fair income distribution. Furthermore,
we brought
past down
papers that hasaguided
few other
us toburning issues that our
further breakdown wasfindings
correlated
and to the corereview.
literature issue.
Lastly,
We wereour recommendations
heavily suggest how
dependent on secondary datatoand
better
otherthe systemsources.
research in a whole.
We have tried to collect as
2.0the
For MACROECONOMIC MANAGEMENT
findings section we tried to interpret the data found in your literature review. Our main focus
was
2.1 Bangladesh's Development Has management
to create a connection between macroeconomic and fair income distribution.
Been Characterized by Prudent Also, we
focused on the key changes
Macroeconomic and reforms already adopted in Bangladesh to fight against the obstacles
Management
Bangladesh's economy performed admirably until fiscal year 2019. (August 2018–June 2019).
Between FY2011 and FY2019, the economy expanded at an average rate of 6.9 percent. In
FY2018-19, Bangladesh's GDP grew at the fastest rate in Asia-Pacific. Poverty decreased from
48.9 percent in fiscal year 2001 to 20.5 percent in fiscal year 2019, with extreme poverty
decreasing from 34.3 percent to 10.5 percent during that time period. Inflation has slowed to
5.5 percent. Fiscal restraint has been demonstrated by keeping the budget deficit to
approximately 5% of GDP. In 2015, the country achieved lower-middle-income status, and in
March 2018, it met all criteria for the first time to be classified as a least developed country.
Since March 2020, the COVID-19 epidemic has harmed Bangladesh's economy, despite the
fact that our economy performed normally during the first eight months of FY2020. Economic
growth slowed to 5.24 percent in FY2020, the slowest pace since FY2009.
Page | 16
Table
In the2.1: Key Macroeconomic
background section we haveIndicators, FYan2009-2020
tried to give overview of the past state of Bangladesh in this
matter GDP
Fiscal of discussion.
Per Next,Inflation
we have stated
Budgewhat our key
Total focus is. Exports,
Imports Basically, we have done aForeign
Remittance core problemCurrency
Yearidentification. Following
Growth Capita the core
Rate issue, we
t have jotted
Debt down
Mill the questions
Mill that will
Mill USDhelp us approach Exchange
Exchange to
a conclusion
(%) in aIncome,
constructive manner. The objective
Deficit to of the
USDpaper isUSD set in accordance to our research Rate
Reserve
questions. USD (% of GDP (Mill
GDP) (%) USD)
FY
For the literature
5.05
review, we
759 7.6
have gathered
-3.50
as39.3
much scholarly
22,507
paper as we could
15,565 9,689
to get a hold
7,471
of the 68.50
2008-09
FY past papers
5.57 that843 has guided
6.82us to further
-3.20breakdown
37.4 our findings16,205
23,738 and literature review. 10,750
10,987 69.18
2009-10
FY 6.46 928 10.9 -3.90 38.0 33,658 22,928 11,650 10,912 71.17
2010-11
FY 6.52 955 8.7 -3.60 37.4 35,516 24,302 12,843 10,364 79.10
2011-12
FY was to6.01create a 1054
connection6.8between -3.90 36.6
macroeconomic 34,084
management 27,027
and fair 14,461 15,315 Also, we
income distribution. 79.93
2012-13
FY 6.06 1184 7.4 -3.60 35.0 40,732 30,187 14,228 21,508 77.72
2013-14
FY 6.55 1316 6.4 -4.10 32.3 40,704 31,209 15,317 25,020 77.67
2014-15
FY 7.11 1465 5.9 -3.90 31.5 43,122 34,257 14,931 30,168 78.26
2015-16
FY matter of discussion.
7.28 1610 Next,5.4
we have stated
-3.40 what 30.8our key focus is.34,656
47,005 Basically, we have done a33,493
12,770 core problem79.12
2016-17
FY a conclusion
7.86 in a1751
constructive
5.8 manner. The objective
-4.70 31.9 of the paper36,668
58,865 is set in accordance
14,982 to our research 83.70
32,943
2017-18
questions.
FY 8.15 1909 5.5 -5.50 33.1 59,915 40,535 16,420 32,716 84.03
2018-19
FY work 5.24
that has already
2064 been 5.7done on the-5.23stated35.7
topic. We have also
54,785 tried to bring
33,674 18,205out the loopholes
36,016 in 84.60
the
2019-20
Source: Socioeconomic Development in Bangladesh & Stimulus Packages to Combat COVID-19
2.2 Economic Growth
For the findings
Bangladesh section
is rapidly we tried tointo
expanding interpret
one ofthe
thedata found
world's in your literature
fastest-growing review. OurEconomic
economies. main focus
growth exceeded 6% in fiscal years 2010-11, 7% in fiscal years 2015-16, and 8% in fiscal years Also, we
2018-19, extending the trend. Bangladesh's economy has been negatively impacted by the
COVID-19 epidemic since March 2020, despite the country's economic performance being
typical for the first eight months of FY2019-20. In fiscal year 2019-20 (July 2019 to June
Lastly,economic
2020), our recommendations
growth slowedsuggest howpercent,
to 5.24 to betterthe
theslowest
system rate
in a whole.
since fiscal year 2008-09.
The average growth rate increased slightly between fiscal years 2011 and 2015, then
accelerated to 7.6 percent between fiscal years 2016 and 2019.COVID-19, on the other hand,
has resulted in an actual average GDP growth rate of 7.13 percent for the fiscal years 2016-
2020.
Page | 17
2.3 Per of
matter Capita GNINext, we have stated what our key focus is. Basically, we have done a core problem
discussion.
Rapid per capita GDP
identification. Followinggrowth,
the corepaired
issue, with a consistent
we have inflow
jotted down of remittances,
the questions that willhas contributed
help us approach to
toa the
conclusion
steady ingrowth
a constructive manner.gross
of per capita The objective
national of the paper
income is setBy
(GNI). in accordance to our research
2015, Bangladesh had
questions.
already met the World Bank's lower middle-income nation (LMIC) standards. Bangladesh is
onFor
course to attainreview,
the literature upper wemiddle-income
have gatheredstatus (UMIC)
as much by paper
scholarly 2031, as
owing to a to
we could large
get aincrease in
hold of the
per capita
work thatgross national
has already income
been done on(GNI) over the
the stated lastWe
topic. decade. Bangladesh
have also met out
tried to bring the the
criteria to be in the
loopholes
removed fromthat
past papers thehas
Least Developed
guided Countries
us to further list inour
breakdown 2018. In FY2020,
findings per capita
and literature GNI will have
review.
topped $2064.
Table 2.2: GDP Growth, Per Capita GDP Growth, and Per Capita GNI
GDP
For the GROWTH,
findings section wePER
triedCAPITA GDP
to interpret GROWTH,
the data ANDliterature
found in your PER CAPITA GNI
review. Our main focus
Fiscal Year Average GDP Per Capita GDP Per Capita
was to create a connection between macroeconomic management and fair income distribution. GNI Also, we
Growth
focused on the key changes and reformsRate Growth
already adopted (%) to fight (US$)
in Bangladesh againstof the
the obstacles
faced to fully implement fair income distribution. Furthermore, we brought down a few other
Terminal Yearburning
issues–that
1990 1995was correlated to the core
4.2 issue. 2.4 253
Lastly,–our
1997 2002 5.2 how to better the system
recommendations suggest 3.5 in a whole. 431
2011 – 2015 6.3 4.9 1,314
2016 - 2020 7.1 5.7 2,064
a conclusion
2.4 in a constructive manner. The objective of the paper is set in accordance to our research
Fiscal Management
questions.
Despite its financial difficulties, Bangladesh performed admirably in fiscal management,
keeping
For the the budgetreview,
literature deficitwewithin
have an acceptable
gathered level
as much of 5% paper
scholarly of GDP. Ascould
as we a result of attempts
to get to
a hold of the
mitigate
work thatthehas
negative
already economic
been done impact of COVID-19,
on the stated the budget
topic. We have deficit
also tried hasout
to bring increased to 5.5 in the
the loopholes
percent of GDP, as a result of which the budget deficit has increased to 5.5 percent of GDP.
The
We government expanded on
were heavily dependent transfers,
secondaryfood
dataaid, socialresearch
and other protection, andWe
sources. help
havetotried
formal and as
to collect
informal companies, all of which resulted in an increase in government spending.
sampleincreased
Despite size wasn’tgovernment
adequate. borrowing, the total debt to GDP ratio is far lower than the IMF's
threshold.
The government made substantial moves in the 8th FYP (Five Year Plan) to solve various long-
standing
faced tobudget management
fully implement difficulties.
fair income Bangladesh
distribution. has a low
Furthermore, tax-to-GDP
we brought down ratio, one ofburning
a few other the
lowest
issuesin thewas
that world. The government
correlated to the core has launched a variety of reforms and efforts to strengthen
issue.
fiscal management and expand fiscal space in order to expand the size and scope of the social
Lastly, our
support recommendations
cushion, suggestpoverty
therefore lowering how to better the system
and inequality in aencouraging
and whole. the disadvantaged
to engage in productive activities. Efforts to increase revenue mobilization have been hampered
by the government's swift response during COVID-19, which was focused on rehabilitating
lives and livelihoods.
Page | 18
In the
3.0 Keybackground
Changes section we have tried
& Reforms to give an overview of the past state of Bangladesh in this
Adopted
3.1 The Planning Procedure & Measures Undertaken to Enhance Domestic
Resource Mobilization
Domestic
questions.resource mobilization projects' principal objective is to boost tax compliance without
increasing rates. As a result, restructure efforts attempt to
• that
work Improve revenue
has already management
been done on theand compliance
stated topic. We have also tried to bring out the loopholes in the
• Increase the tax base and simplify tax structures
We• were
Eliminate or reduce tax
heavily dependent exemptions
on secondary and
data taxother
and holidays granted
research for long
sources. periods
We have triedof
totime
collect as
Asmuch discreet
a result, data as we could.
the government However, and
has launched we have faceda resource
planned number ofand time constraint.
initiatives to boostBesides that, our
domestic
resource mobilization. The completed, ongoing, and planned reforms are listed below.
focused
3.2 on theUndertaken
Reforms key changes and
& reforms
Ongoing already adopted in Bangladesh to fight against the obstacles
3.2.1 Implementation of New VAT Law
In July of this year, the VAT and Supplementary Duty Act of 2012 went into effect. In the
medium term,
Lastly, our the implementation
recommendations of how
suggest the new VATthe
to better lawsystem
is likely
in ato improve VAT and extra tax
whole.
collection.
matter
3.2.2 of discussion.
Automation of Next,
VATwe have stated what our key focus is. Basically, we have done a core problem
Systems
identification.
Currently, threeFollowing the core issue,
critical automation we havehave
processes jottedbeen
down the questions
performed thatofwill
as part thehelp
'VATus approach
online to
a conclusion
Project (VoP)'.in aTo
constructive
begin, themanner.
Online The
VATobjective of the paper
Registration is set
process in accordance
began in Marchto2017.
our research
The
questions.
central registration system has been operating since July 2019. Second, the NBR began Online
Return
For theSubmission in July
literature review, we2019. Finally, on
have gathered July 16,
as much 2020,paper
scholarly it willaslaunch a pilot
we could to getprogram
a hold offor
the
workpayment
VAT that has already been done
via electronic on the
means stated topic. We have also tried to bring out the loopholes in the
(e-payment).
3.2.3 Introduction of Electronic Fiscal Device
ToWecombat
were heavily dependent
VAT evasion andonincrease
secondary datacollection,
VAT and other research
the NBRsources. We have tried
has implemented to collect as
Electronic
much discreet data as we could. However, we
Fiscal Devices (EFDs) in commercial premises. have faced resource and time constraint. Besides that, our
3.2.4 Enactment of New Customs Law
Fornew
The the findings
customssection
law iswe tried toto
intended interpret thestreamline
unify and data found customs
in your literature review.
operations, Our main
making focus
it easier
to collect customs duties.
facedUpgrading
3.2.5 to fully implement
CustomsfairAutomated
income distribution.
SystemFurthermore, we brought down a few other burning
Inissues
July that
2013,wasthe
correlated to the upgraded
government core issue. the customs assessment and clearance system by
introducing the online-basedsuggest
Lastly, our recommendations Automated
how to System
better thefor Customs
system Data (ASYCUDA) World
in a whole.
software.
3.2.6 Simplifying Tax Procedures
3.2.7 Programs to Expand the Number of Taxpayers
There were 2.4 million taxpayers who filed returns in fiscal year 2020. There were 5.0 million
taxpayers in all. The NBR has conducted surveys and planned a significant number of tax fairs
across the country in the coming years in order to boost the number of taxpayers.
Page | 19
3.2.8 Discouraging
matter of discussion.Tax Exemptions
Next, we have stated what our key focus is. Basically, we have done a core problem
identification.
Since the FY20Following the government
budget, the core issue, wehas
have jotted down
discouraged the exemptions.
such questions thatAs will help usincome
a result, approach to
a conclusion
tax exemptions in were
a constructive
reduced bymanner.
41% in The objective
FY20 over of the paper
FY19. is set in
Similarly, accordance
customs to our research
exemptions were
questions.
lowered by 21.34 percent and VAT exemptions by 92 percent in FY20.
For the
3.2.9 literature review,
Introducing ADR to weResolve
have gathered
Revenueas much scholarly paper as we could to get a hold of the
Disputes
work that has already been done on the stated topic.
The government has established an Alternative Dispute We have also tried
Resolution to bring
(ADR) out thetoloopholes
process expedite in the
the resolution of disputes involving Customs, VAT, and Income Tax.
3.2.10 National Savings Certificate (NSC) Digitalization
3.2.11
sampleSurplus funds
size wasn’t from SOEs
adequate.
The government has enacted a new law, the "Submission of Surplus Funds of Autonomous,
For the findings section
Semi-Autonomous, we tried to interpret
State-Owned, the data
and Public found in yourCorporations
Non-Financial literature review. Our National
to the main focus
Treasury Act 2020," to transfer all idle and surplus funds from state-owned enterprises to the Also, we
national treasury in order to increase non-tax revenue collection. Under this statute, ten SOEs
deposited a total of Tk. 16,046 crore in the national treasury in FY20.
3.2.12
Lastly,Introduction of Sukuk
our recommendations Bondhow to better the system in a whole.
suggest
To bolster the local bond market, the government introduced the Islamic Sukuk Bond. It sold
In the
BDT background
bonds section
for 4,000 crorewe
in have tried to
December giveand
2020 an overview of theanother
aims to issue past state
BDTof Bangladesh
bond worthin4,000
this
matter
crore of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem
shortly.
questions.
3.3 Planned Reforms
For the
3.3.1 literature
Adoption ofreview,
a Newwe have gathered
Customs Law as much scholarly paper as we could to get a hold of the
work
The that has already
government wantsbeen donethe
to enact on new
the stated topic.
customs lawWeinhave also tried to bring out the loopholes in the
FY22.
3.3.2 Creating a New Tax Code
We administration
The were heavily dependent
plans toonintroduce
secondaryadata
newand other research
Income Tax Actsources. We have
that would tried to collect
modernize and as
simplify the tax code in order to make it more pro-people.
3.3.3 Automating the TIN Registration Process
The government plans to automate and connect TIN registration to the National ID.
focused
3.3.4 on theManagement
Revenue key changes and reforms already adopted in Bangladesh to fight against the obstacles
Integrated
faced
The to fully implement
government wants tofair income distribution.
establish Furthermore,
a national integrated we brought
information down a few
technology other burning
platform for
the collecting of all tax payment data from tax returns, banks, third-party collection agencies,
and other
Lastly, sources.
our recommendations suggest how to better the system in a whole.
3.3.5 Automating Customs Bond Management

The government has begun work on automating the bond management system by 2021 in order
to streamline the bonded warehousing system, restrict its misuse, and increase its transparency.
3.3.6 Scan All Trade Consignments
The government aims to install scanning equipment in customs stations to ensure that all import
and export shipments are scanned. This will eliminate misdeclaration and expedite the
clearance process.
Page | 20
3.4 Monetary
matter Policy
of discussion. & Monetary
Next, Management
we have stated what our key focus is. Basically, we have done a core problem
Inidentification.
keeping withFollowing
the government's policies and objectives
the core issue, we have jotted downforthesustainable growth,
questions that the monetary
will help us approach to
a conclusion
policy stance in a constructive
and manner. for
monetary program TheFY2019-20
objective of the
werepaper is set in accordance
established with the dualto our research
objective
ofquestions.
preserving price stability while simultaneously promoting economic growth. A low inflation
rate
Forover the long review,
the literature run reflects a solid
we have balance
gathered of monetary
as much scholarlyand fiscal
paper policy
as we couldand management.
to get a hold of the
We were heavily dependentInflation Ratedata

on secondary (%),and
FYother
2009- FY 2020
research sources. We have tried to collect as
much
12 discreet data as we could. However, we have faced resource and time constraint. Besides that, our
10
8
6
Lastly,
4 our recommendations suggest how to better the system in a whole.
In the
2
background section we have tried to give an overview of the past state of Bangladesh in this
identification.
0 Following the core issue, we have jotted down the questions that will help us approach to
a conclusion
FY 2009 in
FYa2010
constructive
FY 2011 FYmanner. The objective
2012 FY 2013 FY 2014 FY of theFYpaper
2015 is 2017
2016 FY set inFYaccordance
2018 FY 2019toFY
our research
2020
questions.
Inflation Rate (%)
work that has already been done
Figure onInflation
3.1: the stated topic.
Rate (%),We
FYhave also
2009- FYtried
2020to bring out the loopholes in the
4.0 Findings
4.1 Utilizing monetary policy to ensure economic liquidity in the aftermath of
COVID-19
The Bangladesh
faced Bank's annual
to fully implement monetary
fair income program
distribution. allowed for
Furthermore, wesufficient expansion
brought down in money
a few other burning
and credit
issues thattowas
reach the nominal
correlated to theGDP
core target.
issue. On March 24, 2020, Bangladesh Bank reduced the
repo rate from 6% to 5.75 percent in order to ensure adequate liquidity in the financial sector
inLastly, our recommendations suggest how to better the system in a whole.
anticipation of a financial crisis caused by the COVID-19 pandemic. With effect from April
12, 2020, the repo rate was further reduced to 5.25 percent. The CRR was reduced from 5% to
4.5% daily and from 5.5% to 5% biweekly, with future reductions to 3.5% and 4% beginning
on April 15, 2020.To stimulate lending to the private sector and improve liquidity in the
banking system, Bangladesh Bank increased the advance-deposit ratio (ADR) and investment-
deposit ratio (IDR) by 2% to 87 percent and 92 percent, respectively.
Page | 21
4.2 Making
matter Progress
of discussion. Next, on Poverty
we have statedand Income
what Inequality
our key focus is. Basically, we have done a core problem
identification. Following
4.2.1 Reduced Poverty the core issue, we have jotted down the questions that will help us approach to
aWithout
conclusion
theinCOVID-19
a constructive manner.the
outbreak, The objective of the
Government's paper reduction
poverty is set in accordance to ourhave
targets would research
been
questions.
substantially met. This is a crucial conclusion since it indicates the poverty strategy's tenacity
prior
For thetoliterature
COVID-19. However,
review, we have in a post-COVID-19
gathered future,
as much scholarly the poverty
paper reduction
as we could to get amethod may
hold of the
needthat
work to behasmodified to meet
already been donethe
onpoverty reduction
the stated targets
topic. We set out
have also triedintoSustainable
bring out theDevelopment
loopholes in the
Goals
past (SDG)
papers 01 guided
that has and theus Perspective Plan 2041.
to further breakdown The Government's
our findings and literaturestrategy
review. for poverty
reduction included efforts to accelerate growth, increase domestic and foreign employment,
and improve
much the pro-poor
discreet data nature
as we could. of growth
However, through
we have an emphasis
faced resource on agriculture,
and time microcredit,
constraint. Besides that, our
and public
sample spending
size wasn’t on rural infrastructure, as well as public spending on social protection.
adequate.
Bangladesh reduced poverty from 40% in 2005 to 20.5 percent in 2019, and extreme poverty
For the25.1%
from findingstosection we tried
10.5 percent to interpret
during the sametheperiod
data found
– an in your literature
incredible review. Our
achievement mainpraised
widely focus
by development practitioners.
Poverty Rate (%) Extreme Poverty Rate (%)
45
40
35 of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem
matter
identification.
30 Following the core issue, we have jotted down the questions that will help us approach to
25
questions.
20 literature review, we have gathered as much scholarly paper as we could to get a hold of the
For the
work15that has already been done on the stated topic. We have also tried to bring out the loopholes in the
10
much5discreet data as we could. However, we have faced resource and time constraint. Besides that, our
sample
0 size wasn’t adequate.
2005 2016 2019
was to create4.1:
Figure a connection
Comparisonbetween macroeconomic
of poverty management
rate and extreme andalong
poverty rate fair income distribution.
the years 2005 - 2019Also, we
4.3 Bangladesh's key determinants of poverty reduction are as follows
Lastly,
4.3.1 our
GDPrecommendations
Expansion suggest how to better the system in a whole.
GDP development continues to be the most important driver in poverty alleviation in
Bangladesh. As a result, the acceleration of GDP growth considerably contributed to poverty
reduction. Additionally, the continued emphasis on agriculture, combined with legislative
initiatives aimed at increasing productivity and diversification, has resulted in great success,
boosting farm earnings.
Page | 22
4.3.2 Growth
matter in Employment,
of discussion. Labor
Next, we have statedProductivity
what our key& Realis.Wages
focus Basically, we have done a core problem
identification.
Real wages inFollowing the core
agriculture issue, significantly
climbed we have jottedasdown theproductivity
labor questions thatincreased
will help usand
approach
the to
a conclusionlabor
agricultural in a constructive manner.Non-farm
market tightened. The objective of the paper
employment is set
saw in accordance
a rise to ourasresearch
in real wages well.
questions.
This rise in real earnings has aided in the reduction of poverty in both rural and urban areas.
4.3.3
past Remittances
papers that has guided us to further breakdown our findings and literature review.
Over time, the number of migrant workers leaving the country has risen substantially.
Additionally, evidence suggests that the skill profile of migrant workers has qualitatively
improved.
sample sizeThe government
wasn’t granted a special incentive of a 2% higher exchange rate in FY2019
adequate.
to encourage external remittances. These changes have resulted in a large increase in
For the findings
remittances fromsection we tried
FY2018. to interpret
Remittances thebeen
have data found
foundintoyour literature
alleviate review.
poverty in Our main focus
a variety of
ways, and the multiplier effects of remittance inflows are a significant contributor to rural we
was to create a connection between macroeconomic management and fair income distribution. Also,
transformation and a diverse employment and income base for the rural poor, according to
numerous studies.

4.3.4 Expansion
In the backgroundofsection
Microcredit
we have tried to give an overview of the past state of Bangladesh in this
Rural and urban areas alike,
matter of discussion. Next, we new financial
have toolsour
stated what based on ICT
key focus is. (mobile
Basically,banking) are redefining
we have done a core problem
the landscape of impoverished people's access to financial services. In the realm of microcredit,
the Microcredit
a conclusion in a Regulatory Authority
constructive manner. The(MRA)
objectiveenacted legislation
of the paper is set inin 2010 to toensure
accordance that
our research
questions. institutions (MFIs) are properly supervised and that both borrowers and lenders
microfinance
are protected. Borrowers increased from 20.4 million in FY2015 to 25.76 million in FY2019,
with
worktotal
thatloans more than
has already beentripling
done onfrom Taka topic.
the stated 634 billion to Taka
We have 1,335
also tried to billion.
bring out the loopholes in the
past papershas
Bangladesh thatdeveloped
has guidedaus to further
National breakdown
Financial our findings
Inclusion and literature
Strategy review.
to ensure that all residents
may
We access financial
were heavily services
dependent onatsecondary
an accessible price.
data and Mobile
other Financial
research Services
sources. We transactions
have tried to collect as
more
muchthan quadrupled
discreet between
data as we could. 2014 and 2020.
However, we have faced resource and time constraint. Besides that, our
4.3.5
was Income
to createEquality
a connection between macroeconomic management and fair income distribution. Also, we
Bangladesh has key
focused on the made extraordinary
changes and reforms strides in adopted
already terms ofinGDP growthtoand
Bangladesh fightpoverty reduction.
against the obstacles
Nonetheless, income inequality has become a serious policy issue. The Development Results
Framework (DRF)
issues that was has emphasized
correlated to the coreincome
issue. inequality reduction as a critical development goal
and has incorporated explicit targets for income inequality reduction in the DRF. The DRF
targeted a Gini coefficient of consumption of 0.30 in FY2020, down from 0.32 in FY2010, and
an income inequality Gini coefficient of 0.46.
Page | 23
Evolution of Average Income, Bangladesh, 2000-2020
a conclusion7000
in a constructive manner. The objective of the paper is set in accordance to our research
Thousand of Euro € (2021)
questions. 6000
5000
work that has 4000
already been done on the stated topic. We have also tried to bring out the loopholes in the
past papers that
3000 has guided us to further breakdown our findings and literature review.
2000
1000
sample size wasn’t
0 adequate.
2000 2005 2010 2015 2020
Axis Title
focused on the key changes andGross
reforms already
Domestic adopted inNational
Product Bangladesh
Income to fight against the obstacles
issues that was correlated
Figure 4.2:toEvolution
the core issue.
of Average Income, Bangladesh, 2000-2020
Increased pro-poor growth through increased employment, labor productivity, and wages,
development of human capital with improved access to the poor, expansion of microcredit and
loans to improve the poor's access to growth, and tax reform with a focus on progressive
personal income taxation were all components of the government's strategy to combat income
questions.
inequality.
According to World
work that has alreadyBank
beenestimations, the Gini
done on the stated Coefficient
topic. We have has
alsobeen
tried dropping since
to bring out FY 2000. in the
the loopholes
This
pastobjective is has
papers that helped byusa to
guided strategy
further of inclusiveour
breakdown growth and
findings a literature
and burgeoning social security
review.
system. However, it is a stylised truth that income disparity increases first and subsequently
declines during periods of high economic growth.
5.0
wasRecommendations
to create a connection between macroeconomic management and fair income distribution. Also, we
The purpose
focused on theof key
thischanges
empirical
and study
reformsisalready
to measure theineffect
adopted of macroeconomic
Bangladesh factors
to fight against the on
obstacles
income
faced toinequality and distribution.
fully implement Additionally,
fair income distribution. the study we
Furthermore, examines
broughtthe effects
down a fewof political
other burning
issues that was
economics and correlated to the core
demographic issue.
issues. The investigation concentrated on the effect of
macroeconomic factors on income inequality and discovered an inverted-U-shaped (parabolic)
link between GDP and income inequality, similar to what Kuznets (1955) observed, which
resulted in the creation of the well-known Kuznets curve. Thus, the outcomes of this study in
particular shown that income disparity increases in Asian countries as GDP grows.
The study did note, however, that macroeconomic factors such as greater inflation, terms of
trade, and unemployment all contribute to increased inequality. Along with macroeconomic
factors, political economy and demographic factors—such as ODA, education, and labor force
participation—significantly reduce income disparity in Asian nations, but political risk may
somewhat raise income inequality. Additionally, the analysis demonstrated that there is no
Page | 24
statistically Next,relationship
significant we have stated what our
between key focus
income is. Basically,
disparity and we have done
factors such aas
core problem
capital
identification.
production, debtFollowing thecorruption,
growth, core issue, we
andhave jotted down
population the questions that will help us approach to
increase.
The final recommendations that we can draw from the research and analysis are as follows-
questions.
For
5.1the
Noliterature review, we have gathered as much scholarly paper as we could to get a hold of the
One-Size-Fits-All
Policymakers been done
must study on theto
strategies stated topic.
tackle We haveon
inequality also tried toscale.
a global bring out the loopholes
Raising in the
the poor's
portion of income and preserving the middle-class benefits growth. Additionally, our empirical
analysis
We suggests
were heavily that the on
dependent causes and consequences
secondary data and other of inequality
research varyWeamong
sources. countries
have tried andas
to collect
socioeconomic
much groups.
discreet data as we As a result,
could. appropriate
However, we havetactics will invariably
faced resource vary
and time by country
constraint. and that,
Besides mustour
sample size wasn’t
take into adequate.
account country-specific policy and institutional settings, as well as
capacity/implementation constraints.
5.2 Equitably
faced Balancing
to fully implement Equity
fair income and Efficiency
distribution. Concerns
Furthermore, we brought down a few other burning
The reduction
issues of income to
that was correlated disparity
the coredoes not have to come at the expense of efficiency. An earlier
issue.
IMF study established that there does not have to be a substantial trade-off between efficiency
and equity (Ostry, Berg, and Tsangarides 2014). Redistribution via the tax and transfer system
In
is the background
found section correlated
to be positively we have tried to growth
with give an overview of the past
in the majority state of Bangladesh
of countries, whereas it inis this
found
matter
to be negatively connected with growth only in the most redistributive countries. problem
of discussion. Next, we have stated what our key focus is. Basically, we have done a core This
identification.
demonstrates that the benefits of redistribution to lower-income households and to social and to
Following the core issue, we have jotted down the questions that will help us approach
political stability may outweigh any negative economic effects associated with incentive
questions.
dampening.
past papers that
5.3 Fiscal has guided
Policy Can Be us a
toPowerful
further breakdown
Tool inour
thefindings
Fightand literature
Against review.
Inequality
Fiscal
We werepolicy is dependent
heavily critical foronmacroeconomic stability
secondary data and other and so has
research a roleWe
sources. in have
averting/mitigating
tried to collect as
crisesdiscreet
much that disproportionately
data as we could. affect the we
However, poor.
haveSimultaneously, fiscal
faced resource and timeredistribution along that,
constraint. Besides withour
other macroeconomic objectives
sample size wasn’t adequate. might contribute to increasing the income share of the poor
and middle class, so encouraging growth. Fiscal policy already plays a significant role in
addressing income inequality in a number of advanced economies, but its redistributive role
could be bolstered by increased reliance on wealth and property taxes, more progressive
income taxation, eliminating opportunities for tax avoidance and evasion, and more targeted
social benefits while minimizing efficiency costs in terms of incentives to work and save (IMF
2014a). Additionally, cutting tax expenditures that disproportionately benefit the wealthy and
tax relief—such
Lastly, as decreased
our recommendations taxation
suggest onbetter
how to capitalthegains,
systemstock options, and carried interest—
in a whole.
would promote fairness and allow for growth-enhancing decreases in marginal labor income
tax rates in some countries. In many cases, this rise in government expenditure would have to
be accompanied with an increase in revenue mobilization, a reduction in tax loopholes and
evasion, and a reduction in non-targeted spending (such as oil subsidies).
5.4 Educational Policies Are Critical

Increased skill levels are critical for minimizing income disparity in a society where
technological advancements improve production while also mechanizing occupations.
Page | 25
InEnhancing
the background section we
educational have tried
quality, to givefinancial
removing an overview of the
barriers to past state
further of Bangladesh
education, in this
and promoting
apprenticeship programs are all critical components of increasing skill levels in both
marketable and nontradable sectors. Additionally, these policies can benefit future generations'
economic prospects, as educated individuals are better equipped to deal with technological
questions.
advancements and other developments that directly affect production levels. When the
For the literature
proportion review, we or
of secondary have gathered
tertiary as muchexceeds
graduates scholarly50%
paper
ofasthe
weworking-age
could to get apopulation
hold of the in
industrialized been done
economies, on the stated
initiatives aimedtopic. We have also
at improving thetried to bring
quality of out the secondary
upper loopholes inorthe
postsecondary education are critical. In developing countries with low levels of education
We were heavily
attainment, dependent
policies that on secondary
promote dataequal
more and other research
access sources.
to basic We have
education (fortried to collect
example, as
cash
much discreet
transfers to data as weprimary
improve could. However,
school we have faced
attendance orresource andspending
increased time constraint. Besides
on public that, our
education
benefiting the poor) can contribute to reducing inequality by facilitating the accumulation of
human
For capitalsection
the findings and removing socioeconomic
we tried to constraints
interpret the data found inon educational
your opportunities.
literature review. Our main focus
faced
5.5 to fully implement
Fostering fair income
Financial distribution.
Inclusion SafelyFurthermore, we brought down a few other burning
To make a dent in inequality, financial deepening must be accompanied by increased inclusion
in Economically
Lastly, More Developed
our recommendations Countries
suggest how (EMDCs).
to better Governments
the system in a whole. can play a critical role in
removing barriers to financial inclusion by establishing the necessary legal and regulatory
Inframework
the background
(forsection we have
example, tried to give an
by safeguarding overview
creditor of theregulating
rights, past state ofbusiness
Bangladesh in this and
conduct,
supervising consumer recourse mechanisms), fostering an information environment (for
example, by establishing standards for disclosure and transparency and promoting credit
information-sharing systems and collateral registries), and educating and equipping citizens.
questions.
Furthermore, country experiences show that measures like exempting individuals from onerous
For the literature review,
documentation we have gathered
requirements, requiringas much
banksscholarly paper as
to provide we could
basic to get aand
accounts, holdallowing
of the
work that has already been done on the stated topic. We have also tried to bring out the loopholes
correspondent banking benefit inclusion. On the other hand, credit promotion without regard in the
for financial stability can result in crises, as the US subprime mortgage crisis demonstrated,
Wewith
weredisproportionately
heavily dependentnegative consequences
on secondary for the
data and other poor and
research middle
sources. We class. Additionally,
have tried it
to collect as
much discreet data as we could. However, we have faced resource and time constraint.
exemplifies the broader notion that fundamental socioeconomic problems cannot be resolvedBesides that, our
sample
solelysize wasn’tcredit
through adequate.
infusion. Thus, policies must strike a balance between fiscal prudence,
stability,
For and section
the findings inclusivity and to
we tried innovation anddata
interpret the creativity.
found in your literature review. Our main focus
faced
5.6 to fully implement
Labor fair income
Market Policies distribution.
and Furthermore,
Institutions that arewewell-designed
brought down a can
few other
help burning
reduce
inequality while without impeding efficiency.
Labor
Lastly, ourmarket imperfections
recommendations andhow
suggest institutional weaknesses
to better the system in athat obstruct job growth can be
whole.
remedied by policies that assist low- and middle-income workers. Setting appropriate
minimum wages and investing in well-designed active labor market laws that allow job
searching and talent matching, for example, can be crucial. Increased in-work benefits
consumption by social benefit recipients also contributes to the elimination of income
inequalities. Additionally, eliminating labor market dualism, such as gaps in employment
protection between permanent and temporary workers — notably young workers and
immigrants — might help reduce inequality while increasing market flexibility. More broadly,
labor market policies should aim to avoid excessive regulation or outright contempt for
working conditions. Labor market laws that are overly lenient or lack of programs may leave
Page | 26
unaddressed issues of insufficient knowledge, unequal authority, and insufficient risk
management, hurting the poor and middle class (World Bank 2012). Excessive regulation, on
the other in
a conclusion hand, can worsen
a constructive marketThe
manner. inefficiencies
objective of and institutional
the paper is set in failings,
accordanceputting
to oura research
damper on
job creation and efficiency.
questions.
ForAkiuf89fqwdiqoijNJSIACNKWHIHjknkjnxkasnfhwohoih
the literature review, we have gathered as much scholarly paper as we could to get a hold of the
5.7 Making Labor Markets More Inclusive and Creating Incentives to Reduce
Informality is A Critical Challenge in EMDCS
WeThese
were heavily dependent
countries' on secondary
workers datalack
generally and other research
equitable sources.
access to We have tried employment
productive to collect as
much discreet dataand
opportunities as we
do could. However,
not share evenlyweinhave faced resource
economic growth. and time constraint.
Numerous Besides
low-skilled that, our
workers, in
particular, are trapped in insecure positions, typically in the unregulated and informal economy.
ForEven full-time
the findings employment
section we tried toininterpret
such jobsthe is notfound
data ofteninenough to lift review.
your literature familiesOur
outmain
of poverty.
focus
wasThus,
to create
it is avital
connection
to createbetween macroeconomic
accessible, productive,management
and enjoyable and fairinincome
jobs order distribution. Also, we
to alleviate poverty
focused on the key
and reduce changes and
inequality. reformsemployees
Informal already adopted
must in Bangladesh
possess to fight against
the requisite legal,the obstaclesand
financial,
faced to fully implement fair income distribution. Furthermore, we brought
educational resources to secure employment in the formal sector. Increased formal down a few other burning
sector
employment also demands better incentives for businesses to go formal. Reduced tax, financial,
andour
Lastly, regulatory constraints
recommendations can improve
suggest formalthe
how to better sector
systememployment
in a whole. by reducing the incentives
for businesses to operate informally, both by increasing the benefits of formal sector
participation and by lowering the costs.
5.8 Compatibility
a conclusion of Growth
in a constructive andobjective
manner. The IncomeofEquality
the paper Objectives
is set in accordance to our research
Reforms
questions. aimed at enhancing average living standards may also affect income distribution.
Indeed, reducing inequality requires a multidisciplinary approach that includes labor, social
welfare, financial inclusion, and tax policy. The key to mitigating the negative consequences
pastofpapers
globalization
that has and technological
guided us to furtherchange in advanced
breakdown economies
our findings is to pursue
and literature review.a policy agenda
based on a race to the top rather than a race to the bottom—one that includes policies to foster
Weinnovation,
were heavily reduce
dependent on secondary
burdensome data andmarket
product other research sources.
regulations thatWestifle
have tried to collect and
competition as
technology diffusion, move goods produced upward in the value chain, and ensure that this
upward movement benefits everyone. In emerging economies, boosting agricultural
Forproductivity,
the findings section we tried
speeding to interpret
capital the data found
accumulation, in your literature
and spreading review.inOur
technology main focus
labor-intensive
wassectors
to create
all ahave
connection between
the potential macroeconomic
to dramatically management
improve and fairand
development income distribution.
ensure Also, we
that the fruits of
focused on the key changes and reforms already adopted in Bangladesh to fight
prosperity are shared more broadly (Dabla-Norris and others 2013). To sustain growth in against the obstacles
emerging fair incomemore
market economies, distribution. Furthermore,
intensive we brought
growth patterns, down a resource
improved few otherallocation
burning
flexibility within and across sectors, and the ability to deploy more knowledge- and skill-
intensive
Lastly, production methodologies
our recommendations suggest how will be required.
to better the systemPolicies geared at enhancing everyone's
in a whole.
capabilities, ensuring that a country's infrastructure meets its needs, and fostering innovation
and technology adoption are all crucial for accelerating growth and creating more inclusive
prosperity.
Money distribution research across quantiles indicates that an initial increase in GDP may
result in a shift of income from the poor to the middle class or the highest groups. Additional
GDP growth, on the other hand, reduces the wealthiest group's income share while raising the
Page | 27
Inincome share ofsection

the background the remaining quantiles.
we have tried Education
to give an overviewhas a similar
of the influence
past state on thein income
of Bangladesh this
distribution of quantiles; thus, both education and ongoing GDP growth indicate
matter of discussion. Next, we have stated what our key focus is. Basically, we have done a core problem income
redistribution
identification. away from
Following the issue,
the core wealthiest individuals
we have jotted downandthe
toward the that
questions middle- and us
will help low-income
approach to
a groups.
conclusion in a constructive
Apart manner. is
from that, inflation The objective to
damaging of the paper
bottom is set
20% in of
accordance to our research
the population's income
questions.
distribution, predominantly favoring the richest 20%. In contrast to inflation, unemployment
reduces
For the income
the literature share
review, of all
we have quantiles
gathered save scholarly
as much the richest, whereas
paper tradetoand
as we could get ODA
a hold benefits
of the
increase income shares marginally only for the richest and third quantiles, respectively.
The paper recommends guaranteeing long-term economic growth and utilizing appropriate
fiscal size
sample tools to fairly
wasn’t redistribute growth and trade advantages to lower-income groups.
adequate.
Similarly, expanding access to education, employment, and other revenue-generating activities
For
is the
vitalfindings section
for more fair we tried distribution
income to interpret the
anddata found instability.
economic your literature review. Our main focus
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the background section we have tried to give an overview of the past state of Bangladesh in this
isusbfisbfibsfisbfibsfiibsubsibfisbfisbfisbfisbfibfisbfisfbfisubibfsiufbaisbfiausfbaisbfabfiasusf
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conclusion in a constructive manner. The objective of the paper is set in accordance to our research
questions.
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bbbbbbbbbbbbbbbsbubiiiiiiiiubibasbisufbiabfibafbfibibfibfibiasbfasbfiifbassifbasibsfiabfiabia
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Page | 28
6.0 References
1. Galor, O., & Zeira, J. (1993). Income distribution and macroeconomics. The review of
economic studies, 60(1), 35-52.
2. Moav, O. (1998). Income Distribution and Macroeconomics: Convex Technology and
the Role of Intergenerational Transfers. Hebrew University of Jerusalem Dept. of
Economics Working Paper, (8-1998).
3. Tabassum, A., & Majeed, M. T. (2008). Economic growth and income inequality
relationship: role of credit market imperfection. The Pakistan Development Review,
727-743.
4. Chowdhury, M. A., Nijhum, H. R., & Uddin, K. M. K. (2021). Disintegrated impact of
trade openness on income inequality: empirical evidence from Bangladesh.
Chowdhury, MA, Nijhum, HR, & Uddin, KMK (2021). Disintegrated Impact of Trade
Openness on Income Inequality: Empirical Evidence from Bangladesh. Business and
Economic Research, 11(3), 1-18.
5. Chu, K. Y., Davoodi, H., & Gupta, S. (2000). Income distribution and tax, and
government social spending policies in developing countries.
6. Datt G. and M. Ravallion (1992), "Growth and Redistribution Components of Changes
in Poverty Measures: A Decomposition with Application to Brazil and India in the
1980s", Journal of Development Economics, 38, 275-95.
7. Bourguignon, Francois (2004), "The Poverty-Growth-Inequality Triangle", Paper
presented at the Indian Council for Research on International Economic Relations, New
Delhi.
8. Iqbal, Munawar (2002), "Introduction", in Munawar Iqbal (Editor), Islamic Economic
Institutions and the Elimination of Poverty, The Islamic Foundation, Leicester.
9. Hassan, G., M. (2007). Public Expenditure, Employment and Poverty in Bangladesh:
An Empirical Analysis. Dhaka: Centre for Policy Dialogue (CPD).
10. Mohammad Imran HOSSAIN (2014) IMPACTS OF PUBLIC EXPENDITURE ON
POVERTY IN BANGLADESH: AN EMPIRICAL ANALYSIS, Ritsumeikan Asia
Pacific University, Japan.
11. Rubana Mahjabeen (2008) Micro Financing in Bangladesh: Impact on households,
consumption and welfare, Journal of Policy Modeling, Volume 30, Issue 6, Pages 1083-
1092, ISSN 0161-8938, https://doi.org/10.1016/j.jpolmod.2007.12.007.
12. Bangladesh Country Report: UN CDP Triennial Review Meeting. By Economic
Relations Division, Ministry of Finance, Government of the People’s Republic of
Bangladesh. On February 05, 2021. Retrieved from Bangladesh-2021-Plenary-B.pdf
13. Bangladesh - WID - World Inequality Database. (n.d.). WID - World Inequality Database.
https://wid.world/country/bangladesh/.
14. Bangladesh: The state of income inequality. By Muhammad Abdul Mazid. On October
26, 2019. Retrieved from https://thefinancialexpress.com.bd/views/bangladesh-the-
state-of-income-inequality-1571497852
15. Alvaredo, F., A. B. Atkinson, T. Piketty, E. Saez. 2013. “The Top 1 Percent in
International and Historical Perspective.” NBER Working Paper 19075, National
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16. Atkinson, A.B., T. Piketty, and E. Saez. 2011. “Top Incomes in the Long Run of
History.” Journal of Economic Literature 49 (1): 3–71.
17. Autor, D. H. 2014. “Skills, Education, and the Rise of Earnings Inequality Among the
‘Other 99 Percent.’” Science 344: 843–51.
18. L. F. Katz, and M. S. Kearney. 2006. “The Polarization of the U.S. Labor Market.”
American Economic Review 96 (2): 189–94.
19. W. R. Kerr, and A. D. Kugler. 2007. “Does Employment Protection Reduce
Productivity? Evidence from US States. “ The Economic Journal 117 (June): F189–
F217.
20. Corak, M. 2013. “Income Inequality, Equality of Opportunity, and Intergenerational
Mobility.” Journal of Economic Perspectives. 27 (3): 79–102.
21. Credit Suisse, 2013.
22. Global Wealth Report. Zurich: Credit Suisse AG.
23. Frederiksen, A., and O. Poulsen. 2010. “Increasing Income Inequality: Productivity,
Bargaining and Skill-Upgrading.” IZA Discussion Papers 4791, Institute for the Study
of Labor, Bonn, Germany.
24. Freeman, R. 2010. “Does Inequality Increase Economic Output?” In Controversies
about Inequality. Stanford, CA: Stanford University Press.
25. Express, T. F. (2021, August 02). Growing Income Inequality in Bangladesh Causes
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Page | 30

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ROLE OF MACROECONOMICS

TERM PAPER 2021

FARAH FIROZ PIU

Date of submission: 07.11.2021

Fayeza Fahmida Farah Firoz Piu

3.2.7 Programs to Expand the Number of Taxpayers ................................................................... 19

ForTable 2.1: Key

Lastly, our recommendations suggest how to better the system in a whole.

1.4 Objective of the Study

Lastly, Sample size depends on

3.3.5 Automating Customs Bond Management

We were heavily dependentInflation Ratedata

Lastly, our recommendations suggest how to better the system in a whole.

5.4 Educational Policies Are Critical

Inincome share ofsection

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