Exchange rate policy and export performance in a landlocked developing country: The case of Nepal

Ramesh C. Paudel; Paul J. Burke

doi:10.1016/j.asieco.2015.04.003

Exchange rate policy and export performance in a landlocked developing country: The case of Nepal

Ramesh C. Paudel, Paul J. Burke^*

^*Corresponding author for this work

Indonesia Project

Research output: Contribution to journal › Article › peer-review

20 Citations (Scopus)

Abstract

This paper examines the implications of Nepal's exchange rate policy for its export performance over the period 1980-2010. We first document Nepal's long-standing currency peg against the Indian rupee and that Nepal's real exchange rate appreciated substantially from the late 1990s. We then employ a gravity modeling approach to confirm that this real exchange rate appreciation has adversely affected Nepal's exports, especially to third-country markets. Nepal's exchange rate-related export competitiveness trap provides a motivation to reconsider the current peg.

Original language	English
Pages (from-to)	55-63
Number of pages	9
Journal	Journal of Asian Economics
Volume	38
DOIs	https://doi.org/10.1016/j.asieco.2015.04.003
Publication status	Published - 1 May 2015

Access to Document

10.1016/j.asieco.2015.04.003

Cite this

@article{41eca590f9b94ec9a059b014ee4c70de,

title = "Exchange rate policy and export performance in a landlocked developing country: The case of Nepal",

abstract = "This paper examines the implications of Nepal's exchange rate policy for its export performance over the period 1980-2010. We first document Nepal's long-standing currency peg against the Indian rupee and that Nepal's real exchange rate appreciated substantially from the late 1990s. We then employ a gravity modeling approach to confirm that this real exchange rate appreciation has adversely affected Nepal's exports, especially to third-country markets. Nepal's exchange rate-related export competitiveness trap provides a motivation to reconsider the current peg.",

keywords = "Export performance, Gravity model, Landlocked, Nepal, Real exchange rate",

author = "Paudel, {Ramesh C.} and Burke, {Paul J.}",

note = "Publisher Copyright: {\textcopyright} 2015 Elsevier Inc.",

year = "2015",

month = may,

day = "1",

doi = "10.1016/j.asieco.2015.04.003",

language = "English",

volume = "38",

pages = "55--63",

journal = "Journal of Asian Economics",

issn = "1049-0078",

publisher = "Elsevier B.V.",

}

TY - JOUR

T1 - Exchange rate policy and export performance in a landlocked developing country

T2 - The case of Nepal

AU - Paudel, Ramesh C.

AU - Burke, Paul J.

PY - 2015/5/1

Y1 - 2015/5/1

N2 - This paper examines the implications of Nepal's exchange rate policy for its export performance over the period 1980-2010. We first document Nepal's long-standing currency peg against the Indian rupee and that Nepal's real exchange rate appreciated substantially from the late 1990s. We then employ a gravity modeling approach to confirm that this real exchange rate appreciation has adversely affected Nepal's exports, especially to third-country markets. Nepal's exchange rate-related export competitiveness trap provides a motivation to reconsider the current peg.

AB - This paper examines the implications of Nepal's exchange rate policy for its export performance over the period 1980-2010. We first document Nepal's long-standing currency peg against the Indian rupee and that Nepal's real exchange rate appreciated substantially from the late 1990s. We then employ a gravity modeling approach to confirm that this real exchange rate appreciation has adversely affected Nepal's exports, especially to third-country markets. Nepal's exchange rate-related export competitiveness trap provides a motivation to reconsider the current peg.

KW - Export performance

KW - Gravity model

KW - Landlocked

KW - Nepal

KW - Real exchange rate

UR - http://www.scopus.com/inward/record.url?scp=84928397337&partnerID=8YFLogxK

U2 - 10.1016/j.asieco.2015.04.003

DO - 10.1016/j.asieco.2015.04.003

M3 - Article

SN - 1049-0078

VL - 38

SP - 55

EP - 63

JO - Journal of Asian Economics

JF - Journal of Asian Economics

ER -

Exchange rate policy and export performance in a landlocked developing country: The case of Nepal

Abstract

Access to Document

Other files and links

Fingerprint

Cite this