Possibilities of trade expansion among the SAARC countries: evidence from the macro-economic and regional trade link models

Rahman, Mohammad Mafizur (2005) Possibilities of trade expansion among the SAARC countries: evidence from the macro-economic and regional trade link models. Working Paper. University of Sydney, School of Economics and Political Science , Sydney, Australia. [Report]


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The 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.

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Item Type: Report (Working Paper)
Item Status: Live Archive
Additional Information: No evidence of copyright restrictions preventing deposit.
Faculty / Department / School: Historic - Faculty of Business - No Department
Date Deposited: 27 Mar 2008 09:00
Last Modified: 29 May 2017 01:58
Uncontrolled Keywords: trade expansion, SAARC countries, macroeconomic and trade link models, time Series Data
Fields of Research : 14 Economics > 1402 Applied Economics > 140210 International Economics and International Finance
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
URI: http://eprints.usq.edu.au/id/eprint/3188

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