The paper empirically examines the effects of trade liberalization on undernourishment and income inequality in South Asian countries (sacs). For empirical analysis data is collected for the period 1972-2013 for five South Asian countries which include Bangladesh, India, Nepal, Pakistan and Sri Lanka. Panel fixed effect technique is used to estimate the model. The estimated results reveal that undernourishment has decreased while income inequality has increased in the region after liberalization. Economic development has reduced both undernourishment and income inequality. The results also endorse the role of agriculture factors in reducing undernourishment and the role of education, urban bias, and political democratization in reducing income inequality in sacs. These results are robust to alternative equation specifications and openness measures. The results provide some important policy implications. It is suggested that South Asian countries have to cope with the problem of malnourishment with high agriculture development and economic growth.
The paper empirically analyses the role of macroeconomic, political and institutional variables in determining cyclical patterns of government revenues, expenditures and fiscal balance in South Asian Countries (SACs). Panel regression analysis is conducted for the period 1980 to 2013. The findings support existing literature about developing countries demonstrating that fiscal policies are strongly procyclical in SACs and there is significant evidence of persistence. Revenues have decreased and expenditures have increased with output cycle which has deteriorated the fiscal balance. This indicates that fiscal balance is procyclical with output cycle in SACs and this procyclicality increases during good times. The results suggest that SACs can conduct counter cyclical fiscal policies if they stabilize output, control inflation and structural shocks, have deep financial markets, high financial openness, have few veto players in the political procedures and have stronger institutions. These results are robust to alternative measures of output cycle and model specifications.
The paper empirically examines the effects of trade liberalization reforms on food security in South Asia countries (sacs) using econometric analysis in a panel framework for the period from 1972 to 2013. The estimated results indicate that trade liberalization has a significant positive effect on food production and food security in the region. The results also endorse the role of agriculture factors in improving food production and food security in sacs. The findings indicate that food security is mainly a political problem in South Asia. Solving conflicts politically, violence prevention, the reduction of international arms trade, and the reduction of military expenditures and protection of civil and political rights should be central to policies that address food security issue in the region.
The paper examines the interactions between stock prices, exchange rate, interest rate, inflation and income in Bangladesh, India, Pakistan and Sri Lanka using monthly data for the period 1997:07 to 2013:06. The motivation is to establish the causal and cointegrating relationship between stock prices and macroeconomic variables. The results indicate that cointegration holds between these variables in all countries. Temporal causality results are mixed, from unidirectional causality to bi-directional and even no causality between stock prices and macroeconomic variables. Causality results generally support the 'portfolio approach' that stock prices lead changes in exchange rate. However, the results of impulse response analysis, based on the structural VAR model, support the 'traditional approach' and suggest that it is exchange rate innovations that affect stock prices. Variance decomposition analysis also supports the findings of impulse response analysis.
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