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trade policies. We examine here the consequences of such a “Gulliver” effect, looking at the case of Nepal whose economy is … closely linked to the economy of India. Since India’s protective policies are not optimal for Nepal, we consider the various … alternatives for Nepal. The “optimal divergence” is for Nepal to allow the free import of intermediate and capital goods, while …
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The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...
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Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components of investment. This paper sheds some light on this important issue by...
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The dynamic responses of a developing economy to a variety of policy and external shocks are studied using an empirical macroeconomic model which embodies rational expectations, perfect capital mobility, and import rationing. These features, which are relatively new in developing-country...
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