Inflation
Wasif Wahed, Old DOHS, Dhaka
I would like to thank Mr. Syed A Basher and Mr.Sharif Faisal Khan for their clear and precise article on inflation titled ''The Inflation Debate''(July 30 DS).In this article they clearly mentioned the causes behind Bangladesh's inflationary pressure using the AD-AS model. The gist of their article was that the price level increase in our country is due to both supply shocks as well as demand side shocks and they had statistics to back up their judgment i.e. although the CPI inflation increased, at the same time real GDP also went upward indicating the fact that there has been strong export demand, greater inflow of remittances etc besides the increase in the prices of oil. Therefore this article also highlighted that CDP economist Debapriya Bhattacharya's analysis was wrong, since he had claimed that inflation is occurring due to supply-side shocks only. For a layman like me, this article was certainly an eye-opener as I came to know about the real factors contributing to the increased price level.
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