Author

Kamal Raj Dhungel

Abstract

In seeking solutions for various planning and policy issues of economic development, quantitative tools have been used widely. Macro-models influenced by Keynesian income expenditure theory are often used to redress short-term stabilization problems, however, no consensus among policy makers in developing countries exists due to widerspread differentiations remained in the socio-economic conditions and banking practices. On the basis of prevailing macro-economic conditions of the country, various models such as investment function, government investment expenditure, trade-imports and exports, industrial and agricultural sectors, services sector and models governing monetary aspects and revenue have been introduced. Most of the models include lag endogenous variable as an explanatory variable to capture the partial adjustments.