Macro-economic and trade link models of SAARC countries: an investigation for regional trade expansion

Rahman, Mohammad Mafizur (2008) Macro-economic and trade link models of SAARC countries: an investigation for regional trade expansion. Journal of the Asia Pacific Economy, 13 (1). pp. 46-57. ISSN 1354-7860

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Abstract

The paper examines themacroeconomic structure of SAARC countries, i.e. Bangladesh, India, Nepal, Pakistan and Sri Lanka. 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 considerable scope for trade expansion among the SAARC countries. 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 benefit from the regional trade expansion. The samemay 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.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version deposited in accordance with the copyright policy of the publisher.
Depositing User: Dr Mafiz Rahman
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 22 Feb 2008 06:15
Last Modified: 02 Jul 2013 22:58
Uncontrolled Keywords: trade expansion; SAARC countries; macroeconomic and trade link models; time series data
Fields of Research (FOR2008): 14 Economics > 1402 Applied Economics > 140210 International Economics and International Finance
14 Economics > 1402 Applied Economics > 140212 Macroeconomics (incl. Monetary and Fiscal Theory)
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9103 International Trade > 910301 International Agreements on Trade
Identification Number or DOI: doi: 10.1080/13547860701731853
URI: http://eprints.usq.edu.au/id/eprint/3875

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