Nepal Macroeconometric Model

Publication | June 2005

The NRM Working Paper Series draws on ongoing and recently completed research and policy studies undertaken by NRM and its policy analysis network. The papers represent rudimentary work meant to stimulate discussion and elicit feedback. Papers published under this series could subsequently be revised based on feedback of commentators and published as articles in professional journals or chapters in books.

This paper describes a medium-sized Keynesian income-expenditure model of the Nepalese economy. The model consists of five building blocks: final demand, prices, credit and money, government, and the balance of payments. The model is useful for policy simulations, economic planning and debt sustainability analysis. The forecasting performance of the model, both within-sample and out-of-sample, is evaluated and found satisfactory. A baseline scenario and two additional scenarios consistent with the Tenth Plan are examined.


  • Introduction
  • Review of Previous Models
  • Data
  • The Structure of the Model
  • Policy Scenarios
  • Forecasting Results by Policy Scenarios
  • Conclusion

Additional Details

  • Economics
  • Governance and public sector management
  • Nepal

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