Impact of Financial Liberalization on Welfare: Evidence from Nepal

This study aims at examining the impact of financial liberalization on welfare and presents the empirical evidence from Nepal using ARDL modeling cointegration test method. The test results indicate that financial liberalization is positively associated with increased employment opportunities in both rural and urban areas but negatively associated with the bank credits to the poor. From these results, it can be argued that the net impact of financial liberalization on welfare is ambiguous. Specifically, the incidence of poverty is adversely affected by financial liberalization.