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Output Relationships in South Asia: Are Bangladesh and India Different from Neighbours?

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  • Biru Paksha Paul

Abstract

The formation of the South Asian Association of Regional Cooperation (SAARC) in the mid-1980s was aimed at achieving regional integration and economic growth. Hence, examining output interrelationships among South Asian economies becomes imperative, but work on this aspect has remained conspicuously absent. This study finds a long-run equilibrium relationship over the 1973–2010 period among five major South Asian nations: Bangladesh, India, Nepal, Pakistan and Sri Lanka. Bangladesh and India registered faster growth than other nations in South Asia since the liberalization in the early 1990s. Not only do these two countries appear to have achieved higher output cointegration than any of the other subgroups, but they also exert maximum influence on their neighbours. Liberalization and output cointegration along with high growth appear to be positively associated in South Asian nations. These findings have policy implications for other developing countries that aspire to grow fast, but lack adequate measures on regional integration.

Suggested Citation

  • Biru Paksha Paul, 2013. "Output Relationships in South Asia: Are Bangladesh and India Different from Neighbours?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(1), pages 35-57, March.
    • Handle: RePEc:sae:soueco:v:14:y:2013:i:1:p:35-57
    DOI: 10.1177/1391561413477939
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    Cited by:

    1. Suranjit, K, 2016. "Output Decomposition and the Monetary Policy Transmission Mechanism in Bangladesh: A Vector Autoregressive Approach," MPRA Paper 75495, University Library of Munich, Germany, revised 30 Nov 2016.

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    More about this item

    Keywords

    Output relationships; South Asia; regional integration; impulse responses; variance decompositions;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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