Promoting Economic Literacy in Nepal

 In the most fundamental sense, there are only two ways of increasing the output of the economy: (1) increase in the number of inputs that go into the productive process, or (2) think of new ways in which more output can be produced from the same number of inputs. Especially for an economist it is curious to know which of these two ways has been more important - and how much more important. Essentially what Abramovitz did was to measure the growth in the output of the American economy between 1870 and 1950. Then he measured the growth in inputs (of capital and labor) over the same time period. He then made what were thought to be reasonable assumptions about how much a growth in a unit of labor and how much a growth in a unit of capital should add to the output of the economy. It turned out that the measured growth of inputs (i.e., in capital and labor) between 1870 and 1950 could only account for about 15% of the actual growth in the output of the economy. In a statistical sen...

By Hom Nath Gaire   Foreign trade is considered as an essential factor for accelerating the path of economic development. Most countries are involved into foreign trade to create employment, raise propensity to save, increase foreign exchange earnings, and raise the productivity of investment moving from less productive use to high productive use. For developing countries, foreign trade is the primary vehicle for realizing the benefits of globalization. Import brings additional competition and variety of domestic markets benefiting the consumers. Benefiting business, foreign trade gives firms access to improved capital inputs such as machine, tools, boosting productivity as well. Similarly, foreign trade encourages the redistribution of labor and capital to relatively more productive sectors. Nepal's foreign trade performance has so far been poor as indicated by trade balance and its ratios to national incomes. Several factors seem to be responsible, and of these, its lan...

By Hom Nath Gaire The efficiency of capital markets depends on well-developed securities laws, stock exchange regulations and enforcement mechanisms that ensure that all issuers and investors are treated fairly and equitably. It also depends on companies providing timely, accurate and reliable information to investors, especially financial reports, to help them assess the performance and financial condition of listed companies and make investment decisions. As Nepal has a developing capital market, so is the case of securities laws and regulations. The growth of Nepali capital Market is reflected in the increased turnover, market capitalization and number of listed companies. In such a situation, the unique characteristics of the Nepali economy must have been taken into account while reforming its securities legislation and regulation. Effective market regulation that encompasses the needs of both large and small public companies is particularly challenging for Nepal, a relativ...