Abstract
This paper examines the channels through which financial development
affects economic growth in Bangladesh along with probable feedback effects.
Using Toda-Yamamoto Granger no causality approach the paper finds that
finance causes growth through both capital accumulation and total factor
productivity growth, albeit the former seems to be a more important route
than the later. On the other hand, while there is evidence of feedback effect
from finance to growth, the channel is not that clear.
