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Real Exchange Rates and International Competitiveness of SAAR Countries: An Analysis of Bangladesh, India, Pakistan and Sri-Lanka for 1960-2000

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  • . Chowdhury, Mamta B.

Abstract

In an attempt to measure the intra and international trade competitiveness, we construct the indices of real exchange rate (RER), the conventional measure of competitiveness, for four major South Asian Association of Regional Cooperation (SAARC) nations using annual data for the period of 1960-2000. The objective of the study is to examine the performances of the sampled countries especially after the economic reforms through trade liberalisation that have been taken place under South Asian Preferential Trading Arrangement (SAPTA) and comparing the evolution in Bangladesh, India, Pakistan and Sri Lanka. Our empirical results reveal that in terms of intra regional trade the smaller countries, namely Bangladesh and Sri Lanka reap the higher gains from openness in their trade regime. However, Bangladesh and India gained international competitiveness not until mid 1990s. Movements of Real exchange rates for Pakistan and Sri Lanka indicate that trade liberalisation efforts did not seem to have much positive gain in terms of international trade.

Suggested Citation

  • . Chowdhury, Mamta B., 2005. "Real Exchange Rates and International Competitiveness of SAAR Countries: An Analysis of Bangladesh, India, Pakistan and Sri-Lanka for 1960-2000," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 2(4), pages 5-18.
    • Handle: RePEc:eaa:ijaeqs:v:2:y2005:i:4_1
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    1. Chowdhury, Mamta B., 2005. "Trade Reforms and Economic Integration in South Asia: SAARC to SAPTA," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(4).
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    More about this item

    Keywords

    SAARC; SAPTA; SAFTA; Trading Bloc; Intra- and international Competitiveness; Real exchange rate; Openness in trade regime;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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