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Trade liberalisation and household welfare in Nepal

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  • Acharya, Sanjaya
  • Cohen, Solomon

Abstract

We examine some of the most recent works on general equilibrium models that measured the impact of trade liberalisation on household welfare. We modify the standard neo-classical model and apply it to a typical South Asian village economy which is still lagging in studies of policy modelling. We conclude that the combination of import and export liberalisations generates higher growth but the distribution pattern does not become pro-poor. Liberalisation under a flexible exchange rate regime when compared to the fixed regime can work negatively since the currency may appreciate much and eliminate the comparative advantages. We also find that a piece by piece external reform gives better economic results than implementing all external reforms together.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 30 (2008)
Issue (Month): 6 ()
Pages: 1057-1060

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Handle: RePEc:eee:jpolmo:v:30:y:2008:i:6:p:1057-1060

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Web page: http://www.elsevier.com/locate/inca/505735

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Keywords: Trade liberalisation Household welfare CGE model Pro-poor growth;

References

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  1. Adams, Philip D., 2005. "Interpretation of results from CGE models such as GTAP," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 941-959, November.
  2. Margaret Chitiga & Ramos Mabugu & Tonia Kandiero, 2007. "A Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe," Working Papers 200715, University of Pretoria, Department of Economics.
  3. Naude, Willem & Coetzee, Rian, 2004. "Globalisation and inequality in South Africa: modelling the labour market transmission," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 911-925, December.
  4. Francois, Joseph & Rojas-Romagosa, Hugo, 2005. "Equity, welfare, and the setting of trade policy in general equilibrium," Policy Research Working Paper Series 3731, The World Bank.
  5. Field, Alfred J. & Wongwatanasin, Umaporn, 2007. "Tax policies' impact on output, trade and income in Thailand," Journal of Policy Modeling, Elsevier, vol. 29(3), pages 361-380.
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Cited by:
  1. Acharya, Sanjaya & Hölscher, Jens & Perugini, Cristiano, 2012. "Trade liberalisation and inequalities in Nepal: A CGE analysis," Economic Modelling, Elsevier, vol. 29(6), pages 2543-2557.
  2. John Gilbert & Nilanjan Banik, 2010. "Socioeconomic Impacts of Cross- Border Transport Infrastructure Development in South Asia," Development Economics Working Papers 21803, East Asian Bureau of Economic Research.
  3. John Gilbert, 2008. "Trade Policy, Poverty, and Income Distribution in CGE Models: An Application to SAFTA," Working Papers 200802, Utah State University, Department of Economics and Finance.
  4. Manuel CANTAVELLA-JORDA & Sheila Amin GUTIERREZ DE PIÑERES, 2012. "A Cross-national Panel Study of Devaluations on Disaggregated Export Sectors: A Case for Sector Specific Policies," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(2).

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