Abstract
This paper intends to assess direction and effectiveness of trade policy of Nepal by studying Trade Development between India and Nepal. It follows the comparative method based on the correlation and the simple logarithmic regression model between two-policy implication period: Import Intensive Trade Policy and State led imports intensive Trade Policy (1985-1994) and Export Intensive Trade Policy under Liberalization Regime (1995-2009). This study is based on the secondary data of trade published by the government agency including Central Bureau of Statistics (CBS), Ministry of Finance (MoF), Trade Promotion Center, World Bank, Asian Development Bank. Nepalese Journal of Development and Rural StudiesVol. 14 (Joint issue) (1&2), 2017, Page: 74-79
Highlights
Trade is traditionally understood as exchange of goods
The contribution of Trade Policy Shift (TPS) to real GDP in Nepalese economy is estimated by considering the export to India and the import from India as the explanatory variables
This paper estimates the contribution of export and import trade to real GDP in Indo-Nepal Trade in direction and effective Two Policy modules: the Import Intensive Trade Policy before 1990 and the Export Intensive Trade Policy after 1990
Summary
Trade is traditionally understood as exchange of goods. In the modern eras, trade refers to international trade. International trade economists have typically argued that an open trade regime is very important for economic development This view has been based partly on neoclassical trade theory, which generally finds that a country improves its welfare from trade liberalization, partly on casual empirical observation that countries which remain highly protected for long periods of time appear to suffer significantly and perhaps cumulatively, and partly on systematic empirical work that finds trade liberalization beneficial to welfare/growth (Sachs & Warner, 1995; Rutherford, 1998). There are found extreme and soft voices against globalization, liberalization and privatization policy at the policy level, the business community and the political level, Nepal gives top priority on trade development for redistribution of income and welfare at household level as well as economic growth for poverty reduction and employment opportunities at national level. To analyze the relationship between trade and the growth of real GDP of the country
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