Remittance is one of the popular issues in the development economics. This paper attempted at finding the relationship between remittance flow and economic development using time series data of 1976-2007. The two modern time series econometric approaches- bound testing Autoregressive Distributed Lag Models or Unrestricted Error Correction Model (UECM) and Engel Granger two step procedure for co-integration test- were executed and this study found that remittance was not significantly affecting the GDP per capita both in the short and long run although the foreign direct investment was found significant in the short but not in the long run. The study suggested adopting appropriate steps so that these can be used as a contributor to the economic development.