Santosh Acharya's Blog

Dr Yubraj Khatiwada When Dr Khatiwada joined the office as a governor, most of the macroeconomic indicators were forced people to ask whether Nepal is going to be a failed economy. The credit crunch, high inflation and low economic growth were the major challenges in front of him. At the end of his tenure, he gained faith from the people that he protected the economy through micro-monetary management. He framed the monetary system of the country. He introduced Merger and Acquisition aiming to minimise the cross holding in different banks. Later on, it became the best tool to stabilise the banking system of the country.  His best effort was found in real estate investment, in which he caps the banking lending, which becomes a turning point for protecting this industry from an accident. His practices towards using monetary instrument were significant. His personality worked on implementing the monetary policy throughout his tenure. Unfortunately, he was unabl...

Meso-Economics It   studies the institutional aspect of economy that are not captured by micro or macroeconomics. By pre-supposing the perfect competition, complete information and zero transportation cost, neo-classical economics assumes away the need for institutions like court, parties and religions to deal with the economic problem the people, firms and countries faces. The economists like Kurt Dopfer, John Foster, and Jason Potts have developed a Micro-Meso-Macro theory of evolutionary economics in which "an economic system is population of rules, a structural rules, and a process of rules". The most important feature of Meso-economics framework is to study the actual web of contracts, formal or informal, in family, corporate, market, civil and social institutions. Doing so it provides the natural linkages between micro and macro because the micro level rules and institution typically imply macro level consequences. Meta Economics It goes still furt...

This blog basically deals with the fundamental concept of monetary policy. This is assumed to be beneficial to beginners. Meaning of Monetary Policy It is a set of instruments adopted by the central monetary authority incorporating with the fiscal policy to control the price level. The monetary policy is defined as a discretionary action undertaken by the authorities designed to influence the supply of money and interest rate. Here the policy instruments are; Bank Rate, CRR, SLR, Repo and Reverse Repo, used to control the flow of money supply. Types of Monetary Policy Generally, monetary policy has been classified into two catagories: A. Based on the Objectives:  There are two sets of objectives viz.  A.1 Single-Minded Monetary Policy:  only aims to set a target either on inflation or nominal GNP growth etc . A.2 Multi-Objective Monetary Policy:  is responsible to accomplish multiple tasks viz. Monetary ( money supply, inflation and so on ) and De...

Theories of Public Expenditure In the public policy study, we find that there are many theories that explain the causes of increasing government expenditure. Among many, I    just   have selected four theories and discussed herein. A. Wagner’s Hypothesis Wagner’s hypothesis is propounded by Adolf Wagner . He, in his comprehension comparisons of different countries at different times shows that among progressive people, public expenditure increases regularly takes place in the activity of both the central and local government. This increament by the central and local governments constantly undertake new functions while performing both old and new responsibility more efficient and complete. This law seeks to establish a functional relationship between the rate of economic growth and government activities. It shows that the government sectors grow faster than the economic expenditure. The scope of government activities would continue to increase both absolutely and...