The Impact Of Conflicts On Trade: A Case Study Of Pakistan And India

Abstract

The study investigated the significant association between trade, conflict, macroeconomic instability, and political instability between Pakistan and India. The time series data used and the period from 1996-2020.  For analysis, the econometric approach of cointegration and VECM were used. The study showed that political instability as well as macroeconomic instabilities have significantly declined bilateral trade. similarly, the independent variable of political instability and conflict significantly affects trade openness in both period short and long run. This study suggests fostering economic integration, political stability, and harmonization is essential to enhance trade relations, reduce conflict, and promote mutual prosperity.