Impact of Inflation on Import: An Empirical Study

Md. Ariful Islam

doi:doi:10.11648/j.ijefm.20130106.16

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Impact of Inflation on Import: An Empirical Study

Md. Ariful Islam

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)

Received: 19 September 2013 Accepted: Published: 10 November 2013

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Abstract

Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)
DOI	10.11648/j.ijefm.20130106.16
Page(s)	299-309
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Inflation, Import, Letter of Credit, Exchange Rate, Consumer goods, Trade, GDP

References

[1]	Gupta, S.P & Gupta, M.P (2003) "Business Statistics", Sultan Chand & Sons Publications, 12th Edition.
[2]	Kothari C.R., (2004) "Research Methodology", New Age International Publications, 2nd Edition.
[3]	Samuelson P. A. and Nordhaus W. D.(2005) Economics, 18th edition, McGraw-Hill
[4]	Ahmed S. and Mortaza M. G. (2005), "Inflation and Economic Growth in Bangladesh: 1981-2005", Policy Analysis Unit, Bangladesh Bank, Working Paper Series: WP 0604, pp 4-5.
[5]	Akhtaruzzaman Md. (2005), "Inflation in the Open Economy: An Application of the Error Correction Approach to the Recent Experience in Bangladesh", Policy Analysis Unit, Bangladesh Bank, Working Paper Series: WP 0602, pp 3-5.
[6]	Farah N. and Mortaza M. G. (2009), "Estimating Inflation Rates of Import-Concentrated Commodities", Policy Analysis Unit, Bangladesh Bank, Policy Note Series: PN 0902, pp. 6-8.
[7]	Khanom R. & Rahman M. M. "The Causative Factors of Inflation in Bangladesh: An Economic Study", Chittagong University Studies, Social Science, Vol. XVI, No. 1, pp. 101 – 105.
[8]	Mortaza M. G (2006), "Sources of Inflation in Bangladesh: Recent Macroeconomic Experience", Policy Analysis Unit, Bangladesh Bank, Working Paper Series: WP 0704, pp. 3-5.
[9]	Rahman H. and Mortaza M. G. (2008), "Transmission of International Commodity Prices to Domestic Prices in Bangladesh", Policy Analysis Unit, Bangladesh Bank, Working Paper Series: WP 0807, pp. 11-17.
[10]	Rahman M. (2010), "State of the Bangladesh Economy in FY2009-10: Second Reading, Dhaka: Centre for Policy Dialogue", pp. 8-12.
[11]	www.primebank.com.bd
[12]	www.businessdictionary.com
[13]	www.wikipedia.com
[14]	www.bangladeshbank.org.bd
[15]	www.financialexpress.com

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Md. Ariful Islam. (2013). Impact of Inflation on Import: An Empirical Study. International Journal of Economics, Finance and Management Sciences, 1(6), 299-309. https://doi.org/10.11648/j.ijefm.20130106.16

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ACS Style

Md. Ariful Islam. Impact of Inflation on Import: An Empirical Study. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 299-309. doi: 10.11648/j.ijefm.20130106.16

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AMA Style

Md. Ariful Islam. Impact of Inflation on Import: An Empirical Study. Int J Econ Finance Manag Sci. 2013;1(6):299-309. doi: 10.11648/j.ijefm.20130106.16

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@article{10.11648/j.ijefm.20130106.16,
  author = {Md. Ariful Islam},
  title = {Impact of Inflation on Import: An Empirical Study},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {299-309},
  doi = {10.11648/j.ijefm.20130106.16},
  url = {https://doi.org/10.11648/j.ijefm.20130106.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.16},
  abstract = {Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.},
 year = {2013}
}

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TY  - JOUR
T1  - Impact of Inflation on Import: An Empirical Study
AU  - Md. Ariful Islam
Y1  - 2013/11/10
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130106.16
DO  - 10.11648/j.ijefm.20130106.16
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 299
EP  - 309
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130106.16
AB  - Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.
VL  - 1
IS  - 6
ER  -

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Author Information

Md. Ariful Islam

BASIC Bank Limited, Khulna, Bangladesh

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Plain Text BibTeX RIS

APA Style

Md. Ariful Islam. (2013). Impact of Inflation on Import: An Empirical Study. International Journal of Economics, Finance and Management Sciences, 1(6), 299-309. https://doi.org/10.11648/j.ijefm.20130106.16

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ACS Style

Md. Ariful Islam. Impact of Inflation on Import: An Empirical Study. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 299-309. doi: 10.11648/j.ijefm.20130106.16

Copy | Download

AMA Style

Md. Ariful Islam. Impact of Inflation on Import: An Empirical Study. Int J Econ Finance Manag Sci. 2013;1(6):299-309. doi: 10.11648/j.ijefm.20130106.16

Copy | Download

@article{10.11648/j.ijefm.20130106.16,
  author = {Md. Ariful Islam},
  title = {Impact of Inflation on Import: An Empirical Study},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {299-309},
  doi = {10.11648/j.ijefm.20130106.16},
  url = {https://doi.org/10.11648/j.ijefm.20130106.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.16},
  abstract = {Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Impact of Inflation on Import: An Empirical Study
AU  - Md. Ariful Islam
Y1  - 2013/11/10
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130106.16
DO  - 10.11648/j.ijefm.20130106.16
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 299
EP  - 309
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130106.16
AB  - Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.
VL  - 1
IS  - 6
ER  -

Copy | Download