Money related Extending and Monetary Improvement in Nepal : A Forward Looking CGE Model with Budgetary Intermediation.

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Money related Deepening and Economic Development in Nepal : A Forward Looking CGE Model with Financial Intermediation Dr. Keshab R Bhattarai University of Hull

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Research Questions Is it conceivable to build a Multisectoral Forward Looking Dynamic General Equilibrium Model? What are the productivity and redistribution effects of advancement of the money related segment in Nepal? Do country families acquire than urban family units from advancement?

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Main Characteristics of the Nepalese Economy Low profitability, low wage and across the board neediness High populace development rate High lack of education and low level of human capital improvement Low level of capital aggregation Small open economy intensely impacted by a solitary neighbor in the South (costs, trade rates, budgetary segment approaches) Land-bolted and high cost economy Under created money related markets

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Sources of Financial Sector Distortions Sector Specific contortions

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Vicious Circle of destitution: Development Problem Low Saving Low Investment Low Income Low Capital Stock Low Producitivity

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Structure of the Model Consumers: Urban and Rural Households with unending lives Utility every period Welfare over the period Government Tourists Intermediaries in just in Blackhole Model Producers: Investors: Capital and Investment merchandise Production Firms/Industry: Goods and Services (11 Sectors) Public Goods Tourism Traders: Exporters Nepal-India Market Third Countries Importers Nepal-India Market Third Countries

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Nested Structure of Production In the Economy

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Consumer\'s Problem and Demand

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Producer and Investor\'s Problem

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Armington Conditions for Trade

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Definition of a Competitive Equilibrium in the Economy

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Calibration of the Model

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Calibration of the Model Financial Distortions in the Benchmark

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Path Algorithm: Basics

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Borrowing Lending Scenarios Blackhole Scenario

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Conditional Growth in the Blackhole Scenario

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Conditional Growth in Non-Steady State Scenario

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Summary of Structure of the Scenarios

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Base Year Parameters from Nepal SAM, 1991 Table 5.6 Source: Nepal SAM 1990/91, informative supplement 5.1

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Conclusion of the Study

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Capital Stock in Food-Crop Sector Under Different Model Assumptions

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References Aurbach Alan J. what\'s more, L. J. Kotlikoff (1987), Dynamic Fiscal Policy. Cambridge University Press. Bhattarai Keshab R (1997) Financial Deepening and Economic Development in Nepal :A Forward Looking CGE Model with Financial Intermediation, Ph.D. paper Northeastern University, Boston, Massachussetts. Buehrer Timothy S. what\'s more, F. di Mauro (1993) "A Computable General Equilibrium Model of Nepal", original copy. Go Delfin S. (1993) "Outside Shocks, Adjustment Policies and Investment in a Developing Economy: Illustrations from a forward-looking CGE model of the Philippines" , Journal of Development Economics 44 229-261 Parente S.L.(1994) Technology Adoption, Learning-by-Doing, and Economic Growth, Journal of Economic Theory, 63, pp. 346-369. Rutherford Thomas F. (1995) ,"Extension of GAMS for Complementary Problems Arising in connected Economic Analysis", Journal of Economic Dynamics and Control, 19, 1299-1324. Robinson Sherman (1991) "Macroeconomics, Financial Variables, and Computable General Equilibrium Models", World Development , vol. 19, no.11, pp.1509-1523, Pergamon Press plc. Shoven John B. what\'s more, J. Whalley (1984), "Connected General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey", Journal of Economic Literature , vol. XXII, Sept, pp.1007-1051.

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