We examine some of the most recent works on general equilibrium models that measured the impact of trade liberalisation on household welfare. We modify the standard neo-classical model and apply it to a typical South Asian village economy which is still lagging in studies of policy modelling. We conclude that the combination of import and export liberalisations generates higher growth but the distribution pattern does not become pro-poor. Liberalisation under a flexible exchange rate regime when compared to the fixed regime can work negatively since the currency may appreciate much and eliminate the comparative advantages. We also find that a piece by piece external reform gives better economic results than implementing all external reforms together. © 2008 Society for Policy Modeling.

CGE model, Household welfare, Pro-poor growth, Trade liberalisation
dx.doi.org/10.1016/j.jpolmod.2007.12.005, hdl.handle.net/1765/14699
Journal of Policy Modeling
Erasmus School of Economics

Acharya, S, & Cohen, S.I. (2008). Trade liberalisation and household welfare in Nepal. Journal of Policy Modeling, 30(6), 1057–1060. doi:10.1016/j.jpolmod.2007.12.005