Omkar Poudel

This research paper examines the extent of effectiveness of fiscal and monetary policies in promoting economic growth in Nepal between 1976 and 2023 by applying the autoregressive distributed lag (ARDL) model. Annual data from the World Bank were employed, where fiscal policy is denoted by government expenditure growth and monetary policy by broad money growth, with export growth included as a control variable. The unit root and bounds tests confirmed mixed integration and long-run cointegration among the variables. Empirical results show that monetary policy has a strong and significant influence on long-run GDP growth, whereas fiscal policy has only a small and short-term impact. A 1% increase in broad money supply adds about 0.51% to real GDP, equivalent to roughly USD 185 million per year. A 1% rise in exports increases GDP by 0.099% or around USD 36 million annually. Conversely, government expenditure shows a negative long-term effect of –0.115, translating to a potential GDP reduction of nearly USD 42 million, suggesting inefficiencies in fiscal allocation. The error correction term exhibits a negative sign with statistical significance, supporting a rapid adjustment toward equilibrium. Diagnostic tests verify model stability, normality, and the absence of serial correlation. The results show that monetary and external sector factors are the main long-term drivers of Nepal’s economic growth. Fiscal measures, in contrast, provide only a short-term boost. The study recommends strengthening monetary management, improving fiscal efficiency, and promoting exports to ensure sustained and balanced growth in Nepal. Future research should explore sector-specific and nonlinear responses to fiscal and monetary measures to refine targeted policy interventions.

This study examines the applicability of the random walk hypothesis in the Nepal Stock Exchange (NEPSE), an emerging market marked by inefficiencies such as low liquidity, limited technological infrastructure, and external economic influences. Advanced stochastic models, including Markov chains, martingale techniques, and the Chapman-Kolmogorov equation, are employed to assess NEPSE's weak-form market efficiency. Analysing daily closing price data from 242 listed companies over five weeks, the study reveals significant inefficiencies. Transition matrices demonstrate a high likelihood of price states revisiting specific trends, with stationary vectors [0.4472, 0.5228, 0.0300] reflecting the probabilities of "High," "Low," and "Same" states, respectively. Variance ratio test further confirms deviations from randomness, highlighting inefficiencies such as serial correlation and non-random price fluctuations. These findings indicate that historical prices influence future movements, contradicting the random walk hypothesis. The results stress the need for improved infrastructure, enhanced regulatory frameworks, and investor education to increase market efficiency. By integrating specific numerical findings and inefficiencies, this study provides actionable insights for policymakers and investors while contributing to the academic discourse on emerging markets.

Local government-led school management has emerged as a transformative approach to enhance access, equity, and efficiency in education. In Nepal, decentralization reforms have sought to improve enrollment rates and gender equity, but their long-term effectiveness and challenges have received limited scholarly attention. This study evaluates the impact of local governance on enrollment trends using a mixed-methods approach, analyzing quantitative data from World Bank Indicator (1999–2023) and contextualizing findings with qualitative insights. Fully Modified Ordinary Least Squares (FMOLS) regression was employed to examine long-run relationships and structural changes. The results reveal a significant post- 2017 boost in primary enrollment rates, driven by decentralization reforms, but also indicate a declining growth rate in enrollment thereafter. Regarding the key variables, Net Enrollment Rates (NER), Gross Enrollment Rates (GER), and Gender Parity Index (GPI) demonstrate progress, with GPI achieving parity in primary education by 2012. However, challenges persist, including disparities in secondary education, a decline in secondary GPI, and increasing reliance on private schooling, which raises equity concerns. The FMOLS findings underscore the transformative potential of decentralization while highlighting systemic gaps in retention, public school competitiveness, and regional equity. Strengthening local leadership, addressing socio-economic barriers, and reducing disparities are essential to sustain progress. Nepal’s experience demonstrates that while local government-led reforms can ignite progress, targeted interventions are critical to ensuring inclusive and equitable educational outcomes.

Rice is a staple food and a crucial element of Nepal’s agrarian economy; however, its yield is significantly affected by climatic factors such as rainfall and temperature, as well as agricultural practices like pesticide use. Understanding these dynamics is essential for sustaining productivity in the face of climate change. This study employs an Autoregressive Distributed Lag (ARDL) model to analyze 33 years of time-series data (1990–2022), focusing on key variables including rice yield, temperature, rainfall, and pesticide use, all derived from secondary data sources. Diagnostic tests confirmed normality (????=0.06), absence of serial correlation (????=0.58), and homoscedasticity (????=0.68), with stability validated through CUSUM and CUSUMSQ tests. The results indicate that temperature has a significant positive long-term impact on rice yield (????=2181.48, ????<0.05), suggesting that moderate warming can enhance productivity. Rainfall exerts a marginal positive effect (????=5.10, ????=0.05), while pesticide use shows a strong correlation with yield (????=17.70, ????<0.01). The Granger Causality Test identifies temperature (????=7.76, ????<0.01) and pesticide use (????=11.25, ????<0.01) as critical predictors of rice yield. These findings demonstrate that while temperature and pesticide use significantly affect rice yield, the impact of rainfall is diminished due to effective irrigation systems. Nevertheless, the heavy reliance on pesticides raises sustainability concerns, underscoring the necessity for integrated pest management and environmental safeguards. This study advocates for the adoption of climate-smart agricultural practices, enhancement of irrigation infrastructure, and promotion of sustainable pesticide management, offering actionable insights for policymakers to devise adaptive strategies that bolster resilience and productivity in Nepal’s rice sector.

The purpose of this study is to investigate the role that remittances play in enhancing the economic and social resilience of Nepal’s tourism industry in the face of socioeconomic challenges. This research highlights how remittance inflows are a financial mechanism that sustains and stabilizes the tourism industry. Rather than viewing remittances and tourism income as complementary sources of revenue, this research focuses on how remittances serve as a source of revenue. The study investigates the short-term and long-term relationships between remittances and tourism income by employing time-series data from 1975 to 2023, applying the Autoregressive Distributed Lag (ARDL) model, and conducting Granger causality tests. According to the findings, remittances significantly contribute to the tourism industry by increasing households’ disposable income, boosting the demand for domestic tourism, and opening up opportunities for infrastructure development. Furthermore, the Granger Causality test results indicate that remittances serve as a financial buffer, thereby mitigating the adverse effects of economic downturns and external shocks on the tourism industry. These findings highlight the importance of incorporating remittance flows into tourism development strategies to guarantee the sector’s capacity for adaptation and sustainability during economic uncertainty.

The relationship between economic growth and environmental sustainability has been a central focus in environmental socio-economics. This study investigates the Environmental Kuznets Curve (EKC) hypothesis in the context of Nepal, analyzing the relationship between carbon dioxide (CO2) emissions and economic and demographic factors. Employing time-series data from 1990 to 2020, the study utilizes an Autoregressive Distributed Lag (ARDL) model to investigate both the short-term and long-term dynamics among CO2 emissions, Gross Domestic Product (GDP), population density, and trade openness. The empirical results support the EKC hypothesis, indicating a positive correlation between economic growth and environmental emissions in the short run, with this relationship intensifying over time. To ensure data stationarity and uncover causal links, unit root tests and Granger causality tests were conducted. The Granger causality tests further indicate that CO2 emissions serve as significant predictors of GDP, population density, and trade openness. These findings highlight the critical need for sustainable economic policies that balance growth with environmental conservation in Nepal.

Poverty and inequality remain critical issues in Nepal despite significant poverty reduction over recent decades. Rural and urban poverty trends differ with rural poverty decreasing due to remittances and agricultural productivity, while urban poverty has risen due to migration pressures. This study examines the socio-economic determinants influencing poverty and inequality, focusing on regional differences and policy impacts. Utilizing data from four rounds of the Nepal Living Standards Survey (1995-2023), this study applies descriptive statistics and graphical analysis to assess poverty and inequality trends. Key metrics include the poverty headcount ratio, poverty gap, and Gini coefficient, analyzed across both rural and urban regions to identify distinct socio-economic drivers. Findings indicate a significant reduction in national poverty, primarily driven by remittances although urban poverty has intensified with rapid rural-to-urban migration. The poverty gap and Gini coefficient reveal that inequality remains higher in rural areas despite some improvements. This study highlights the need for region specific policies that address rural poverty drivers and urban challenges tied to migration and inadequate infrastructure. The study concludes that a dual policy approach—targeting rural development and urban poverty management—is necessary for sustainable poverty reduction in Nepal. Future research should further explore long-term impacts of remittances and urban focused poverty interventions.

This research investigates the impact of governance quality, political stability, corruption management, regulatory quality, and governmental effectiveness on economic growth in Nepal, utilizing annual time series data spanning from 1996 to 2022. Advanced econometric techniques, including Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR), are employed to analyze both short- and long-term relationships. The results reveal a significant positive relationship between political stability and economic growth (FMOLS coefficient = 5.51E+09, p < 0.01), underscoring the importance of a stable political environment. Conversely, government effectiveness negatively correlates with GDP (FMOLS coefficient = -2.31E+10, p < 0.01), suggesting potential inefficiencies in governance. Corruption control exhibits mixed effects, showing a positive influence on GDP in some models (CCR coefficient = 1.11E+10, p < 0.10). Similarly, regulatory quality yields variable results, with a positive DOLS coefficient of 9.68E+09 (p < 0.05). Johansen's cointegration test confirms significant long-term relationships among the variables, while Granger causality tests identify political stability and government effectiveness as key drivers of GDP. These findings highlight the need for governance reforms that focus on enhancing political stability, improving regulatory quality, and addressing inefficiencies in public administration. Policymakers are urged to implement targeted strategies to promote sustainable economic growth in Nepal.