Pub Date : 2012-11-15DOI: 10.3126/nrber.v24i2.52723
F. Westermann
A feature of the recent period of output growth in Nepal is that growth has been uneven across sectors. While the services sector has been expanding, the agricultural and manufacturing sectors have growing much more slowly. In this paper we attempt to explain this fact by investigating the linkages between financial development and sectoral output growth in a vector-autoregression (VAR) analysis. We find that the services sector reacts strongly to increases in domestic credit, while agriculture and manufacturing are largely unaffected. We interpret this finding in the context of a two sector-growth model, by Schneider and Tornell (2004), where credit constraints and the access to international capital markets play a central role. We also discuss the importance of our findings for the goal of poverty alleviation.
{"title":"Linkages between Sectoral Output Growth and Financial Development in Nepal","authors":"F. Westermann","doi":"10.3126/nrber.v24i2.52723","DOIUrl":"https://doi.org/10.3126/nrber.v24i2.52723","url":null,"abstract":"A feature of the recent period of output growth in Nepal is that growth has been uneven across sectors. While the services sector has been expanding, the agricultural and manufacturing sectors have growing much more slowly. In this paper we attempt to explain this fact by investigating the linkages between financial development and sectoral output growth in a vector-autoregression (VAR) analysis. We find that the services sector reacts strongly to increases in domestic credit, while agriculture and manufacturing are largely unaffected. We interpret this finding in the context of a two sector-growth model, by Schneider and Tornell (2004), where credit constraints and the access to international capital markets play a central role. We also discuss the importance of our findings for the goal of poverty alleviation.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128857090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-11-01DOI: 10.3126/nrber.v25i1.52696
Subash Acharya
This study aims to identify the trade (export, import and trade balance) determinants of Nepal using extended gravity model and recommend specific trade policy to promote foreign trade. The gravity model of international trade takes notion from Newtonian physical science that the gravitational force between any two objects is proportional to the product of their masses and inversely proportional to distance; similarly, the trade between any two countries is proportional to the product of their GDPs and inversely proportional to distance. Empirical results based on panel data set containing 21 major trade partner countries for 6 years found that export and import of Nepal is explained by real GDP of trade partner countries. Increase in real GDP of trade partner countries increases both export and import; however, export increases at higher rate than import. The trade deficit of Nepal increases if real GDP of trade partner country increases, even though export is increasing at higher rate than import. This is because Nepal is importing more than exporting to those countries in absolute terms. Nepal exports more to SAFTA countries than non-SAFTA and imports less from the OECD countries than non-OECD. As per basic idea of gravity model, distance to trade partner countries is highly significant implying higher the distance, lower the trade. The country specific fixed effect analysis shows that time invariant factors are also significant to determine the trade balance of Nepal.
{"title":"A Panel Data Analysis of Foreign Trade Determinants of Nepal: Gravity Model Approach","authors":"Subash Acharya","doi":"10.3126/nrber.v25i1.52696","DOIUrl":"https://doi.org/10.3126/nrber.v25i1.52696","url":null,"abstract":"This study aims to identify the trade (export, import and trade balance) determinants of Nepal using extended gravity model and recommend specific trade policy to promote foreign trade. The gravity model of international trade takes notion from Newtonian physical science that the gravitational force between any two objects is proportional to the product of their masses and inversely proportional to distance; similarly, the trade between any two countries is proportional to the product of their GDPs and inversely proportional to distance. Empirical results based on panel data set containing 21 major trade partner countries for 6 years found that export and import of Nepal is explained by real GDP of trade partner countries. Increase in real GDP of trade partner countries increases both export and import; however, export increases at higher rate than import. The trade deficit of Nepal increases if real GDP of trade partner country increases, even though export is increasing at higher rate than import. This is because Nepal is importing more than exporting to those countries in absolute terms. Nepal exports more to SAFTA countries than non-SAFTA and imports less from the OECD countries than non-OECD. As per basic idea of gravity model, distance to trade partner countries is highly significant implying higher the distance, lower the trade. The country specific fixed effect analysis shows that time invariant factors are also significant to determine the trade balance of Nepal.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129729101","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-07-01DOI: 10.3126/nrber.v24i2.52725
R. Kharel, D. Pokhrel
Despite causality debate, a number of empirical literatures (Pagano, 1993 and Levine, 1997, among others) suggest a positive relationship between financial sector development and economic growth. Moreover, there remains further debate whether the country's financial structure exerts differential impact on economic growth. Empirical studies across the countries (Rajan and Zingales, 1999 and Arestis et. al. 2004) suggest that banking sector plays a key role in some countries while the capital market has a lead position in others for enhancing economic growth. In this context, this paper investigates the relative merits of banking sector vs. capital market in promoting economic growth in Nepal. The empirical results using Johansen's cointegrating vector error correction model based on aggregate annual data from 1993/9 to 2010/11 suggest that banking sector plays a key role in promoting economic growth compared to capital market in Nepal. It may be either the size of capital market is too small to seek the relationship or it is weakly linked to real economic activities. Our result implies that the policy should focus on banking sector development by enhancing its quality and outreach as it promotes economic growth in Nepal.
尽管因果关系存在争议，但一些实证文献(Pagano, 1993和Levine, 1997等)表明金融部门发展与经济增长之间存在正相关关系。此外，国家金融结构是否对经济增长产生差异影响还有待进一步讨论。各国的实证研究(Rajan and Zingales, 1999和Arestis et al. 2004)表明，银行业在一些国家起着关键作用，而资本市场在其他国家则在促进经济增长方面处于领先地位。在此背景下，本文调查了银行业与资本市场在促进尼泊尔经济增长方面的相对优点。基于1993/9年至2010/11年的年度汇总数据，使用Johansen协整向量误差修正模型的实证结果表明，与资本市场相比，尼泊尔银行业在促进经济增长方面发挥了关键作用。可能是资本市场规模太小，无法寻求这种关系，也可能是资本市场与实体经济活动的联系较弱。我们的结果表明，该政策应侧重于银行业的发展，通过提高其质量和推广，因为它促进了尼泊尔的经济增长。
{"title":"Does Nepal's Financial Structure Matter for Economic Growth?","authors":"R. Kharel, D. Pokhrel","doi":"10.3126/nrber.v24i2.52725","DOIUrl":"https://doi.org/10.3126/nrber.v24i2.52725","url":null,"abstract":"Despite causality debate, a number of empirical literatures (Pagano, 1993 and Levine, 1997, among others) suggest a positive relationship between financial sector development and economic growth. Moreover, there remains further debate whether the country's financial structure exerts differential impact on economic growth. Empirical studies across the countries (Rajan and Zingales, 1999 and Arestis et. al. 2004) suggest that banking sector plays a key role in some countries while the capital market has a lead position in others for enhancing economic growth. In this context, this paper investigates the relative merits of banking sector vs. capital market in promoting economic growth in Nepal. The empirical results using Johansen's cointegrating vector error correction model based on aggregate annual data from 1993/9 to 2010/11 suggest that banking sector plays a key role in promoting economic growth compared to capital market in Nepal. It may be either the size of capital market is too small to seek the relationship or it is weakly linked to real economic activities. Our result implies that the policy should focus on banking sector development by enhancing its quality and outreach as it promotes economic growth in Nepal.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124099195","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-05-15DOI: 10.3126/nrber.v24i1.52730
S. Thapa
This study is carried out to estimate the trade potentiality of Nepal using gravity model. The gravity model simply explains that the volume of trade between pairs of countries is a positive function of the size of two countries and negative function of the distance between them. The study has used coefficients of the model to predict Nepal’s foreign trade for the year 2009. The trade potentiality is calculated with the help of the ratio of predicted trade to actual trade. The result is fluctuating: some countries crossed the limits whereas some countries are still below the potential trade. The study has used gravity model to evaluate the determinants of foreign trade of Nepal using secondary data including 19 major trade partners. The estimated result of Nepal’s trade potentiality shows that Nepal has exceeded trade potentiality with her 10 trading partners, including giant neighbors India and China, and there remains trade potentiality with 9 trade partners including another neighbor Bangladesh.
{"title":"Nepal's Trade Flows: Evidence from Gravity Model","authors":"S. Thapa","doi":"10.3126/nrber.v24i1.52730","DOIUrl":"https://doi.org/10.3126/nrber.v24i1.52730","url":null,"abstract":"This study is carried out to estimate the trade potentiality of Nepal using gravity model. The gravity model simply explains that the volume of trade between pairs of countries is a positive function of the size of two countries and negative function of the distance between them. The study has used coefficients of the model to predict Nepal’s foreign trade for the year 2009. The trade potentiality is calculated with the help of the ratio of predicted trade to actual trade. The result is fluctuating: some countries crossed the limits whereas some countries are still below the potential trade. The study has used gravity model to evaluate the determinants of foreign trade of Nepal using secondary data including 19 major trade partners. The estimated result of Nepal’s trade potentiality shows that Nepal has exceeded trade potentiality with her 10 trading partners, including giant neighbors India and China, and there remains trade potentiality with 9 trade partners including another neighbor Bangladesh.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121458426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-05-15DOI: 10.3126/nrber.v24i1.52738
S. Paudyal
Tourism seems to be widely recognized as the one among a few sectors in Nepal which can be an engine of economic growth. However, there are few empirical studies about Nepalese tourism. This paper, thus, attempts to examine the impact of tourism and other related macroeconomic variables on the economic growth of Nepal by deriving tourism income multiplier from the Keynesian macroeconomic model. The three stage least square and seemingly unrelated regressions are the techniques employed for estimating the value of multiplier. The estimated value of multiplier based on regression results over thirty six year period from 1975 to 2010 is estimated at 1.21. In addition, Granger causality tests are used to confirm the direction of the impact of one variable on another variable, which reveals that there exists bi-directional impact in the case of tourism receipts and GDP. In addition, tourism receipts are found to have bi-directional relationship with some other variables such as GNI, exports, private consumption, imports and so on. Thus, tourism multiplier and the Granger causality tests show that tourism is important component for economic growth in Nepal.
{"title":"Does Tourism Really Matter for Economic Growth? Evidence from Nepal","authors":"S. Paudyal","doi":"10.3126/nrber.v24i1.52738","DOIUrl":"https://doi.org/10.3126/nrber.v24i1.52738","url":null,"abstract":"Tourism seems to be widely recognized as the one among a few sectors in Nepal which can be an engine of economic growth. However, there are few empirical studies about Nepalese tourism. This paper, thus, attempts to examine the impact of tourism and other related macroeconomic variables on the economic growth of Nepal by deriving tourism income multiplier from the Keynesian macroeconomic model. The three stage least square and seemingly unrelated regressions are the techniques employed for estimating the value of multiplier. The estimated value of multiplier based on regression results over thirty six year period from 1975 to 2010 is estimated at 1.21. In addition, Granger causality tests are used to confirm the direction of the impact of one variable on another variable, which reveals that there exists bi-directional impact in the case of tourism receipts and GDP. In addition, tourism receipts are found to have bi-directional relationship with some other variables such as GNI, exports, private consumption, imports and so on. Thus, tourism multiplier and the Granger causality tests show that tourism is important component for economic growth in Nepal.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134170796","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-05-15DOI: 10.3126/nrber.v24i1.52731
H. Neupane, C. Shrestha, Tara Prasad Upadhyaya
The volume of international tourist arrivals is the prime concern for both the tourism entrepreneurs and policy makers, as the arrivals is directly associated with foreign exchange earnings or export benefits, and tourism induced economic activities. The overall average annual growth of international tourist arrivals in the country over the last 40 years is about 6.65 percent. The mean contribution of tourism sector as a percentage of GDP was 2.67 percent during the last 35 years. This paper explores the risk associated in the Nepalese tourism industry taking account of monthly international tourist arrivals. The symmetric and asymmetric conditional mean and volatility models, GARCH, GARCH-GJR and EGARCH with exogenous ARMA terms were applied for data analysis. The empirical results showed that the long run risk or volatility is persistence in monthly international tourist arrivals and estimated coefficients are statistically significant. The volatility can be inferred as risk or uncertainty associated with international tourist arrivals in Nepalese tourism industry. Therefore, this empirical study envisages sufficient room for intervening or amending the tourism policy to better attract international visitors and promote tourism as a business.
{"title":"Modelling Monthly International Tourist Arrivals and Its Risk in Nepal","authors":"H. Neupane, C. Shrestha, Tara Prasad Upadhyaya","doi":"10.3126/nrber.v24i1.52731","DOIUrl":"https://doi.org/10.3126/nrber.v24i1.52731","url":null,"abstract":"The volume of international tourist arrivals is the prime concern for both the tourism entrepreneurs and policy makers, as the arrivals is directly associated with foreign exchange earnings or export benefits, and tourism induced economic activities. The overall average annual growth of international tourist arrivals in the country over the last 40 years is about 6.65 percent. The mean contribution of tourism sector as a percentage of GDP was 2.67 percent during the last 35 years. This paper explores the risk associated in the Nepalese tourism industry taking account of monthly international tourist arrivals. The symmetric and asymmetric conditional mean and volatility models, GARCH, GARCH-GJR and EGARCH with exogenous ARMA terms were applied for data analysis. The empirical results showed that the long run risk or volatility is persistence in monthly international tourist arrivals and estimated coefficients are statistically significant. The volatility can be inferred as risk or uncertainty associated with international tourist arrivals in Nepalese tourism industry. Therefore, this empirical study envisages sufficient room for intervening or amending the tourism policy to better attract international visitors and promote tourism as a business.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129730167","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-02-01DOI: 10.3126/nrber.v24i1.52729
R. Kharel
This paper develops a macroeconomic forecasting model focusing on fiscal policy and economic growth in Nepal. The structure of the model, which comprises a total of 14 equations, allows alternative policy options for maintaining fiscal stability and promoting economic growth as well as switching deficit financing between domestic and foreign loans. We use annual data from 1992/93 to 2009/10 to estimate the model and provide out-sample forecasts for 2010/11 to 2012/13, consistent with the current Three Year Plan period, in order to evaluate the plan performance. The empirical evidence suggests that fiscal policy, particularly governments' capital expenditure affects economic growth positively and also crowds-in private investment. However, there exists a trade-off between fiscal stability and high level of economic growth as the policy goal of achieving both objectives seems to be unattainable. Finally, the out-sample forecast suggests that it is unlikely to attain the targeted economic growth in the Three Year Plan period from the planned fiscal outlay even if it is realized.
{"title":"Modelling and Forecasting Fiscal Policy and Economic Growth in Nepal","authors":"R. Kharel","doi":"10.3126/nrber.v24i1.52729","DOIUrl":"https://doi.org/10.3126/nrber.v24i1.52729","url":null,"abstract":"This paper develops a macroeconomic forecasting model focusing on fiscal policy and economic growth in Nepal. The structure of the model, which comprises a total of 14 equations, allows alternative policy options for maintaining fiscal stability and promoting economic growth as well as switching deficit financing between domestic and foreign loans. We use annual data from 1992/93 to 2009/10 to estimate the model and provide out-sample forecasts for 2010/11 to 2012/13, consistent with the current Three Year Plan period, in order to evaluate the plan performance. The empirical evidence suggests that fiscal policy, particularly governments' capital expenditure affects economic growth positively and also crowds-in private investment. However, there exists a trade-off between fiscal stability and high level of economic growth as the policy goal of achieving both objectives seems to be unattainable. Finally, the out-sample forecast suggests that it is unlikely to attain the targeted economic growth in the Three Year Plan period from the planned fiscal outlay even if it is realized.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130337071","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2011-11-20DOI: 10.3126/nrber.v23i2.52743
B. P. Gautam
Tourism has become an important economic activity in all the countries of the world. It creates various direct, indirect and induced effects in the economy. This paper attempts to confirm empirically about the positive impact of tourism in Nepal. It is based on Nepalese data of foreign exchange earnings from tourism and gross domestic product for the period between FY 1974/75 and 2009/10. Co-integration test has been done for ascertaining long run relationship and error correction method for short run dynamics. Granger Causality test has been applied to determine causal relationship between these variables. The evidence confirms the conventional wisdom that of tourism development, that tourism (represented by foreign exchange earnings) causes economic growth both in short and long run. The result also indicates bi-directional causality between these variables.
{"title":"Tourism and Economic Growth in Nepal","authors":"B. P. Gautam","doi":"10.3126/nrber.v23i2.52743","DOIUrl":"https://doi.org/10.3126/nrber.v23i2.52743","url":null,"abstract":"Tourism has become an important economic activity in all the countries of the world. It creates various direct, indirect and induced effects in the economy. This paper attempts to confirm empirically about the positive impact of tourism in Nepal. It is based on Nepalese data of foreign exchange earnings from tourism and gross domestic product for the period between FY 1974/75 and 2009/10. Co-integration test has been done for ascertaining long run relationship and error correction method for short run dynamics. Granger Causality test has been applied to determine causal relationship between these variables. The evidence confirms the conventional wisdom that of tourism development, that tourism (represented by foreign exchange earnings) causes economic growth both in short and long run. The result also indicates bi-directional causality between these variables.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"133 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134308267","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2011-11-20DOI: 10.3126/nrber.v23i2.52741
N. Maskay, R. Pandit
Increasing financial sector development and globalization have significantly changed the nature of macro-financial link. The paper aims to obtain insight on how these changes have impacted on the effectiveness of monetary policy management, by undergoing a case study of Nepal. The empirical results over the thirty five year period spanning FY 1975 to FY 2009, find that the elasticity of the real interest rate is not economically and statistically significant in relation to the output gap. This result is further explored by examining sequentially the contributions of direct financing, domestic financial sector development and external integration. The results suggest that while their respective contribution to the elasticity of the real interest rate is now statistically significant, however it remains economically insignificant. Further the direction of effect is opposite to that of the theoretically predicted sign; this contrary result implies that the residual is driving the regression results. The results further suggest that the economic regime shift in early-1990s, had contributed to weaken the elasticity of the real interest rate. The general insight from the Nepalese case study is that countries have to re-examine on a regular basis the nature of macro-financial link to ensure optimal monetary policy management.
{"title":"Macro-Financial Link and Monetary Policy Management: Insight from the Case of Nepal","authors":"N. Maskay, R. Pandit","doi":"10.3126/nrber.v23i2.52741","DOIUrl":"https://doi.org/10.3126/nrber.v23i2.52741","url":null,"abstract":"Increasing financial sector development and globalization have significantly changed the nature of macro-financial link. The paper aims to obtain insight on how these changes have impacted on the effectiveness of monetary policy management, by undergoing a case study of Nepal. The empirical results over the thirty five year period spanning FY 1975 to FY 2009, find that the elasticity of the real interest rate is not economically and statistically significant in relation to the output gap. This result is further explored by examining sequentially the contributions of direct financing, domestic financial sector development and external integration. The results suggest that while their respective contribution to the elasticity of the real interest rate is now statistically significant, however it remains economically insignificant. Further the direction of effect is opposite to that of the theoretically predicted sign; this contrary result implies that the residual is driving the regression results. The results further suggest that the economic regime shift in early-1990s, had contributed to weaken the elasticity of the real interest rate. The general insight from the Nepalese case study is that countries have to re-examine on a regular basis the nature of macro-financial link to ensure optimal monetary policy management.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115532144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2011-11-20DOI: 10.3126/nrber.v23i2.52745
B. Paudel
This study first conducts a detailed survey on recently emerged new field in economics called new open economy macroeconomics and then carries out an empirical test of theoretical predictions of these models to observe transmission effects of Indian economic shocks in South Asia region. In the survey, the study starts with the seminal work of Obstfeld and Rogoff (1995) and then evaluates the subsequent evolution of this field. The survey reveals that the field is rapidly evolving with many dimensions added on it within a short period of time, making this field richer and betterable to perform better predictions. The estimation of Vector Autoregression model for South Asia region, on the other hand, uncovers that the effects of Indian shocks in South Asia region, have mixed results. Since the real, nominal, and financial shocks generated in India affect the economies of neighboring countries with varied extent.
{"title":"New Open Economy Macroeconomics: Evidence from an Empirical Test on South Asian Economic Data","authors":"B. Paudel","doi":"10.3126/nrber.v23i2.52745","DOIUrl":"https://doi.org/10.3126/nrber.v23i2.52745","url":null,"abstract":"This study first conducts a detailed survey on recently emerged new field in economics called new open economy macroeconomics and then carries out an empirical test of theoretical predictions of these models to observe transmission effects of Indian economic shocks in South Asia region. In the survey, the study starts with the seminal work of Obstfeld and Rogoff (1995) and then evaluates the subsequent evolution of this field. The survey reveals that the field is rapidly evolving with many dimensions added on it within a short period of time, making this field richer and betterable to perform better predictions. The estimation of Vector Autoregression model for South Asia region, on the other hand, uncovers that the effects of Indian shocks in South Asia region, have mixed results. Since the real, nominal, and financial shocks generated in India affect the economies of neighboring countries with varied extent.","PeriodicalId":372963,"journal":{"name":"NRB Economic Review","volume":"102 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126333011","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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