It was proposed by economist John B. Taylor in 1993. Taylor’s Rule is a monetary policy guideline that suggests how a central bank should set the nominal interest rate based on economic conditions—especially inflation and…
It is also called the Neo-classical theory of interest Rate Determination. Developed by economists like Knut Wicksell and Dennis Robertson. Interest rate is determined by the demand and supply of loanable funds. The interest rate is…
What is Cost Curve? The cost curve is the graphical representation of the relationship between cost and output. So, cost curves are derived from the production function. The nature of production function affects the shape…
The Cobb–Douglas form was developed and tested against statistical evidence by Charles Cobb and Paul Douglas between 1927 and 1947. It is the empirical production function that shows that the output can be expressed as a multiple of…
The Absorption Approach to the Balance of Payments, developed by Sidney Alexander in the 1950s, defines a country’s trade balance as the difference between total national income (Y) and total domestic expenditure (A, or absorption).…
Demand Curve = Price and Quantity Relation A demand curve shows the relationship between price and quantity demanded of a commodity, other things remaining the same. Such a relationship is derived generally by keeping the…
Nepal’s economy has been converted to the remittance based economy where remittance specially the foreign remittance, has been the lifeblood of the economy at boththe household and macro levels. In the household economy, remittance has…
Previous post Foreign Investment and Economic Diplomacy Economic diplomacy has been an integral component of Nepalese Foreign Policy after the reorientation of the foreign policy in the 1990s. Since then, Nepal has emphasized the economic…
There is no single specific theory of underdevelopment. However, there are different theories, under different names, that have tried to explain the persistent underdevelopment of low-income countries worldwide. Such theories are known as Neo-Marxist theory,…