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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.

Suggested Citation

  • Acharya, Sanjaya & Cohen, Solomon, 2008. "Trade liberalisation and household welfare in Nepal," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1057-1060.
  • Handle: RePEc:eee:jpolmo:v:30:y:2008:i:6:p:1057-1060
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    References listed on IDEAS

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    1. Margaret Chitiga & Tonia Kandiero & Ramos Mabugu, 2005. "Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe," Working Papers MPIA 2005-01, PEP-MPIA.
    2. 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.
    3. Dorothée Boccanfuso & Luc Savard, 2005. "Impact Analysis of the Liberalization of Groundnut Production in Senegal: A Multi-household Computable General Equilibrium Model," Cahiers de recherche 05-12, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    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.
    6. 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.
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    Cited by:

    1. John Gilbert & Nilanjan Banik, 2012. "Socio-economic impacts of regional transport infrastructure in South Asia," Chapters,in: Infrastructure for Asian Connectivity, chapter 5, pages 139-163 Edward Elgar Publishing.
    2. 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).
    3. 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.
    4. John Gilbert, 2008. "Trade Policy, Poverty, and Income Distribution in CGE Models: An Application to SAFTA," Working Papers 2008-02, Utah State University, Department of Economics, revised 19 Dec 2008.
    5. Acharya Sanjaya & Signorelli Marcello & Vojinovic Borut & Oplotnik Žan Jan, 2013. "Alternative Approach to Economic Restructuring to Benefit the Poor – Sam Multipliers Analysis as Alternative Approach," Scientific Annals of Economics and Business, De Gruyter Open, vol. 60(1), pages 182-201, July.
    6. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
    7. Ziaur Rahman, 2014. "The impact of trade liberalization on poverty reduction in Bangladesh: A computable general equilibrium (CGE) analysis," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(4), pages 240-253, April.
    8. 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.

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