This paper studies the effects of removing transport and trade barriers between Bangladesh and India on aggregate real income and the distribution of population and real income within both countries. The paper uses a spatial general equilibrium model calibrated to these two economies, along with road network travel time calculated using GPS data, to measure changes in economic outcomes given changes in trade costs across regions. The paper focuses on the Motor Vehicles Agreement between Bangladesh, Bhutan, India, and Nepal and full transport and trade integration between Bangladesh and India. The counterfactual exercises show that decreasing transport and trade barriers between Bangladesh and India can lead to up to a 7.6 percent increase in national real income for India and a 16.6 percent increase for Bangladesh.
Details
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Author
Herrera Dappe,Matias, Lebrand,Mathilde Sylvie Maria, Van Patten,Diana
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Document Date
2021/03/26
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Document Type
Policy Research Working Paper
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Report Number
WPS9592
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2021/03/26
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Disclosure Status
Disclosed
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Doc Name
Bridging Bangladesh and India : Cross-Border Trade and the Motor Vehicles Agreement
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Keywords
intermediate input; changes in trade; trade costs; distribution of population; general equilibrium model; real income; impact of transport; increasing market access; quality of infrastructure; secondary road network; total factor productivity; number of workers; unit labor; unit of labor; share of wage; tract of land; transport integration; bilateral trade; private capital; agglomeration externality; Road Networks; indian states; average speed; digital development; International Trade; marginal increase; tradable sector; exogenous characteristic; personal vehicle; capital owner; cross-border movement; traded goods; commonly known; economic geography; productive activity; spatial model; wage inequality; border regions; high wage; nontraded good; total trade; increasing return; labor mobility; rural transportation infrastructure; spatial distribution; freight shipment; equilibrium price; economic integration; agglomeration economy; cross-border trade; Research Support; random number; logistics company; online marketplace; development policy; open access; baseline scenario; shorter route; low border; waiting time; relative change; budget constraint; net export; price set; border post; tradable good; transport cost; domestic price; intraregional trade; land rent; idiosyncratic shock; residential land; perfect competition; local production
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Citation
Herrera Dappe,Matias Lebrand,Mathilde Sylvie Maria Van Patten,Diana
Bridging Bangladesh and India : Cross-Border Trade and the Motor Vehicles Agreement (English). Policy Research working paper,no. WPS 9592 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/635471616767281403/Bridging-Bangladesh-and-India-Cross-Border-Trade-and-the-Motor-Vehicles-Agreement