Background: There is special role of money in the economy due to its astonishing importance as change in the amount of it can have a significant effect on the major macroeconomic variables. Money supply is generally considered as policy-determined phenomenon. Like in all the nations, macroeconomic stability of Nepal also depends on the variation in the quantity of money. Objective: The principle objective of the study is to examine the impact of money supply on the economic growth of Nepal. Methodology: This study applies the ARDL approach to cointegration. Bounds test (F-version) has been carried out to determine the existence of long-run relationship between variables. Results: The empirical results pointed out that there is positive and significant long-term relationship between money supply and real economic growth in Nepal. Causality result reveals that there is unidirectional causality from money supply (M2) to Real GDP. The error correction term is found negative and statistically significant suggesting a correction of short-run disequilibrium within two and a half years. Conclusions: The study concludes that increase in the money supply helps to increase the real economic growth in Nepal. So, money supply and real GDP are associated in the long-run. Implications: The implication of the study is that, real economic growth in Nepal can be achieved if Nepal Rastra Bank emphasized on monetary policy instruments which help to increase the flow of money supply both in the short and long run.
Foundry based organizations consume significant amounts of energy for producing their final products. Recently, techno-commercial and environmental factors have started triggering change from fossil fuels to cleaner ones. In this paper, factors acting as driving forces for migration from one fuel to another in order to improve energy efficiency, including various performance parameters in support of environment preservation, have been identified. Focus is also given to challenges which encounter during fuel switching. A new framework has been applied that can be used for fuel switching in manufacturing organizations. A real case of switching from three types of fuels to a single fuel has been studied and the outcomes are evaluated. Analysis related to energy consumption before and after fuel switching with respect to corresponding production data have been performed.
This study attempts to examine the role of the inflow of resources on the economic growth of Nepal incorporating annual time-series data sets of 45 years from 1975 to 2019. The autoregressive distributed lag approach to cointegration is used to identify the long-run as well as the short-run relationship between the variables. The empirical finding indicates that there is a positive relationship between the inflow of resources and economic growth. Quantitatively, gross national saving, domestic loans, foreign loans, and export earnings have a positive impact on the economic growth in both the long-run as well as short-run for the Nepalese economy. Policies encouraging private sector participation, enlarging efficiency, and effectiveness of public sector projects, and expanding export base must be implemented.
Background: There are different sources of economic growth, including domestic savings for capital formation. Domestic savings mobilized into the expansion of productive capacity of an economy adds economic growth and thereby reinforces investment and savings. Gross savings and capital formation matter for the economic growth of Nepal. Objective: The study's main objective is to inspect the nexus between gross domestic saving, gross capital formation, and economic growth in Nepal. Methodology: This study uses the Auto-Regressive Distributive Lag (ARDL) approach to cointegration. Zivot-Andrews (ZA) unit root test has been used to check for a structural break in data, and the Bounds test has been carried out to explore the existence of a long-run association between variables. Results: The empirical outcomes pointed out a positive and significant long-run relationship between gross domestic savings, gross capital formation, and economic growth in Nepal. Zivot-Andrews unit root tests reveal a structural break in the data set. Causality result indicates a unidirectional linkage from gross investment to growth, economic growth to gross domestic saving, and a bidirectional linkage between gross domestic savings and gross investment. Conclusion: The study concludes that an increase in the productive capability through increased saving and investment in the productive sector helps increase the economic growth in Nepal. So, gross domestic savings, gross investment, and economic growth are associated in the long run with one structural break. Implications: The study implies that real economic growth in Nepal can be enlarged if the government of Nepal focuses on an increase in saving and make strong provisions for mobilizing and investing such savings into productive sectors of the economy. Originality: This paper is original and has not been published in other publications. Similarly, no financial support has been received while working on this paper. Paper Type: Research paper
This paper explores the short-run and long-run causal relationship between government expenditure, labor force, gross investment, aggregate consumption, and economic growth of Nepal. The gross domestic product (Y), capital expenditure (K), population (L), gross investment (GI), and aggregate consumption (CO) have been used to find the causal relationship between government expenditure, and economic growth. The ARDL cointegration technique confirms a long-run association among the variables. The study revealed that capital expenditure, labor force participation, gross investment, and aggregate consumption all are the long-run driver of the economic growth of Nepal. These findings tell that efficient and timely allocation and use of capital expenditure, expansion of public as well private investment, and increased aggregate consumption matters for economic growth. The study also shows the existence of unidirectional causation from capital expenditure to growth and bidirectional relationship between other variables. The findings support Keynesian thought of government expenditure and economic growth. The regulatory and policymakers should focus on expansionary fiscal policy to stimulate capital formation, efficient productive investment, boost effective demand, and enhance long-run economic growth in Nepal.
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