The study examines the causality of financial institutions and economic growth of Nepal during th... more The study examines the causality of financial institutions and economic growth of Nepal during the period of 1975 to 2012 through granger causality, Johansen cointegration and vector error correction model (VECM). The empirical analysis shows that there is existence of long run association among the gross domestic product (GDP), gross capital formation (GCF), broad money (M2) and domestic credit to private sectors (DCPS). The VECM suggests for the validity of long run association among the variables. There is no granger causality between GCF and GDP; M2 and GDP; DCPS and GDP and DCPS and M2 however, there is bidirectional granger causal relationship between M2 and GCF and unidirectional relationship between GCF and DCPS. The empirical results conclude that there is a long-run association between financial institutions and economic growth in Nepal.
The study examines the causality of financial institutions and economic growth of Nepal during th... more The study examines the causality of financial institutions and economic growth of Nepal during the period of 1975 to 2012 through granger causality, Johansen cointegration and vector error correction model (VECM). The empirical analysis shows that there is existence of long run association among the gross domestic product (GDP), gross capital formation (GCF), broad money (M2) and domestic credit to private sectors (DCPS). The VECM suggests for the validity of long run association among the variables. There is no granger causality between GCF and GDP; M2 and GDP; DCPS and GDP and DCPS and M2 however, there is bidirectional granger causal relationship between M2 and GCF and unidirectional relationship between GCF and DCPS. The empirical results conclude that there is a long-run association between financial institutions and economic growth in Nepal.
Uploads
Papers by bumocol col