Abstract
Basic intent of this paper is to examine the relationship between financial development ... more Abstract Basic intent of this paper is to examine the relationship between financial development and economic growth in Nepal. Private sector credit to GDP, broad money to GDP, commercial bank assets to total assets ratios and number commercial bank branches are taken as indicators of financial development. Using data series of 1975 to 2012 this study develops a composite index of financial development and examines its effect on economic growth of Nepal. Using total factor productivity approach and error correction modeling this study has reached to the conclusion that financial development, real stock of capital, real per capita capital, working age labour force, real export and government expenditure are positively driving the growth process while inflation and trade openness are decelerating the economic growth in Nepal
Price stability, exchange rate stability, favorable balance of payment, sustained economic growth... more Price stability, exchange rate stability, favorable balance of payment, sustained economic growth etc. are the goals of monetary policy. A major tools of monetary policy attaining such goals is the management of stock of money. If money stock is exogenous, central monetary authority can have full control over it. If it is endogenous, it has less controllability characters. This study makes an empirical investigation on indigeneity and exogeneity of money supply in Nepal over the period 1985-2010. Using granger causality test in both co-integrated and non-co-integrated relation, this study finds that broad money, narrow money and bank loan are causing the reserve money. GDP and price level are causing the monetary aggregates. Money multiplier also depend upon bank loan and GDP. Reserve money is also causing monetary aggregates. These finding leads to the conclusion that Money supply in Nepal endogenous variables. Total stock of money is determined by joint action of general public, banking sectors and central monetary authority
Monetary and fiscal policies are used for macroeconomic stabilization and to achieve low level of... more Monetary and fiscal policies are used for macroeconomic stabilization and to achieve low level of inflation and high level of economic growth. To execute these policies direction of causality between money, price, and income should be known. It is in this connection that this study examined the direction of causality between money, price and income in Asian countries namely- Nepal, India, Sri Lanka, Myanmar and Korea using the annual time series data of the period 1964-2011. Bivariate Granger causality test was performed for both non-cointegrated and cointegrated variables using conventional Granger F test and ECM models respectively. Causal nexus between these variables, in some extent, differed from one structure of economy to another but in all countries money was causing price and income. Feedback effects were coming either from price or income or the both. Thus, this study reaches to the conclusion that money supply is an endogenous variable in all the countries, though the ext...
Abstract
Basic intent of this paper is to examine the relationship between financial development ... more Abstract Basic intent of this paper is to examine the relationship between financial development and economic growth in Nepal. Private sector credit to GDP, broad money to GDP, commercial bank assets to total assets ratios and number commercial bank branches are taken as indicators of financial development. Using data series of 1975 to 2012 this study develops a composite index of financial development and examines its effect on economic growth of Nepal. Using total factor productivity approach and error correction modeling this study has reached to the conclusion that financial development, real stock of capital, real per capita capital, working age labour force, real export and government expenditure are positively driving the growth process while inflation and trade openness are decelerating the economic growth in Nepal
Price stability, exchange rate stability, favorable balance of payment, sustained economic growth... more Price stability, exchange rate stability, favorable balance of payment, sustained economic growth etc. are the goals of monetary policy. A major tools of monetary policy attaining such goals is the management of stock of money. If money stock is exogenous, central monetary authority can have full control over it. If it is endogenous, it has less controllability characters. This study makes an empirical investigation on indigeneity and exogeneity of money supply in Nepal over the period 1985-2010. Using granger causality test in both co-integrated and non-co-integrated relation, this study finds that broad money, narrow money and bank loan are causing the reserve money. GDP and price level are causing the monetary aggregates. Money multiplier also depend upon bank loan and GDP. Reserve money is also causing monetary aggregates. These finding leads to the conclusion that Money supply in Nepal endogenous variables. Total stock of money is determined by joint action of general public, banking sectors and central monetary authority
Monetary and fiscal policies are used for macroeconomic stabilization and to achieve low level of... more Monetary and fiscal policies are used for macroeconomic stabilization and to achieve low level of inflation and high level of economic growth. To execute these policies direction of causality between money, price, and income should be known. It is in this connection that this study examined the direction of causality between money, price and income in Asian countries namely- Nepal, India, Sri Lanka, Myanmar and Korea using the annual time series data of the period 1964-2011. Bivariate Granger causality test was performed for both non-cointegrated and cointegrated variables using conventional Granger F test and ECM models respectively. Causal nexus between these variables, in some extent, differed from one structure of economy to another but in all countries money was causing price and income. Feedback effects were coming either from price or income or the both. Thus, this study reaches to the conclusion that money supply is an endogenous variable in all the countries, though the ext...
Uploads
Papers by Prof. Dr. Ram Prasad Gyanwaly
Basic intent of this paper is to examine the relationship between financial development and economic growth in Nepal. Private sector credit to GDP, broad money to GDP, commercial bank assets to total assets ratios and number commercial bank branches are taken as indicators of financial development. Using data series of 1975 to 2012 this study develops a composite index of financial development and examines its effect on economic growth of Nepal. Using total factor productivity approach and error correction modeling this study has reached to the conclusion that financial development, real stock of capital, real per capita capital, working age labour force, real export and government expenditure are positively driving the growth process while inflation and trade openness are decelerating the economic growth in Nepal
Basic intent of this paper is to examine the relationship between financial development and economic growth in Nepal. Private sector credit to GDP, broad money to GDP, commercial bank assets to total assets ratios and number commercial bank branches are taken as indicators of financial development. Using data series of 1975 to 2012 this study develops a composite index of financial development and examines its effect on economic growth of Nepal. Using total factor productivity approach and error correction modeling this study has reached to the conclusion that financial development, real stock of capital, real per capita capital, working age labour force, real export and government expenditure are positively driving the growth process while inflation and trade openness are decelerating the economic growth in Nepal