Possibilities of Trade Expansion among the SAARC Countries: Evidence from the Macro-Economic and Regional Trade Link Models
AbstractThe paper examines the macroeconomic structure of SAARC countries-Bangladesh, India, Nepal, Pakistan and Sri Lanka- individually with a view that this would help policy makers and planners to analyse the impacts of different policy options and costs and benefits of increased economic integration in the SAARC region. It also explores the possibility of trade expansion among these countries by examining the macro-economic and regional trade link models based on time series data of 28 years. The study finds that there are inter-country differences in production and consumption patterns, investment behaviour, tax and non-tax structures in the SAARC countries. Hence there is a considerable scope for trade expansion among the SAARC countries based on comparative advantages. The study also confirms that aggregate regional consumption and regional GNP increase significantly with the increase of aggregate regional trade, and the consumption and income elasticities are 1.70 and 1.61 respectively. The study also exhibits that the GNP of Bangladesh, Nepal, Pakistan and Sri Lanka, with limited exceptions, are significantly increased with the increase of their exports to the region. So these countries would definitely be benefited from the regional trade expansion. The same may be true for India if the smuggled trade is prevented or reduced, and true economic factors, keeping aside political conflicts, dominate for regional trade policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Sydney, School of Economics in its series Working Papers with number 4.
Date of creation: Feb 2005
Date of revision:
Trade Expansion; SAARC Countries; Macroeconomic and Trade Link Models; Time Series Data;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Syed Nawab Haider Naqvi & Ather Maqsood Ahmed & Ashfaque H. Khan, 1984. "Possibilities of Regional Trade Expansion. A Link Model for Pakistan, India,Bangladesh and Sri Lanka," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 23(1), pages 9-35.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vanessa Holcombe).
If references are entirely missing, you can add them using this form.