Income convergence of the Saarc-5 countries
This paper proposes that multilateralism and regionalism are complementary, and that regional income convergence is likely when a culturally similar mindset and committed regionalism exists. Historical policy interventions of SAARC are: the formation of SAARC in 1985, the introduction of the SAARC Preferential Trading Agreement in 1995, the formation of the South Asian Free Trade Area in 2006, more bilateral agreements since 1990, and multilateral liberalization by most member countries in the 1990s. The paper uses LP approach and also explores the cointegration and causal relationships between international trade, income per capita, and income convergence and concludes that multilateral liberalisation have had a positive impact on increasing trade.
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