Trade Liberalization Widens Inequality, Hurts Rural Poor in Nepal
In Nepal, they looked at how making international trade easier affects poverty levels. To do this, they used a detailed model that represents households from a national survey. The results showed that when tariffs (taxes on imported goods) were reduced, poverty went down in cities but increased in rural areas since rural goods had high tariffs. The impact of trade changes differed based on people's incomes, leading to a wider gap between rich and poor. Overall, the study revealed that trade liberalization can have both positive and negative effects on poverty levels in Nepal, depending on the region and people's income levels.