IDEAS home Printed from https://ideas.repec.org/a/nrb/journl/v26y2014i2p61.html
   My bibliography  Save this article

Determinants of Inflation in Nepal: An Empirical Assessment

Author

Listed:
  • Shoora B. Paudyal Ph.D.

    (Tribhuvan University, Kathmandu)

Abstract

This paper examines short term and long term effects of the macroeconomic variables on the inflation in Nepal during 1975-2011. The variables considered are budget deficits, Indian prices, broad money supply, exchange rate and real GDP. The regression results from Wickens-Breusch Single Equation Error Correction model suggest that all variables considered are significant in long run implying that these variables are the determinants of inflation in Nepal. However, only budget deficit, money supply and Indian prices cause inflation in the short run. The results are consistent with monetarists’ hypothesis of money matters and inflationary gap theory of Keynesian as well as supply constraints approach to inflation.

Suggested Citation

  • Shoora B. Paudyal Ph.D., 2014. "Determinants of Inflation in Nepal: An Empirical Assessment," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 26(2), pages 61-82, October.
    • Handle: RePEc:nrb:journl:v:26:y:2014:i:2:p:61
    as

    Download full text from publisher

    File URL: http://www.nrb.org.np/ecorev/pdffiles/vol26-2_art4.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Inflation; Budget Deficits; Single Equation ECM; Imported Prices; Consumer Price Index; M2; GDP;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nrb:journl:v:26:y:2014:i:2:p:61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publication Division NRB (email available below). General contact details of provider: https://edirc.repec.org/data/nrbgvnp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.