To avoid the conflict between the goals/targets of the fiscal and monetary policy. To develop private-sector confidence and boost investment in the economy. To maintain price stability and external sector stability. To promote growth and…
The effectiveness of the monetary policy should be assessed in terms of the achievement of its policy goals and targets. In the case of Nepal, the monetary policy and its effectiveness are found to be…
The global financial crisis of 2007/08 made a policymaker to rethink the traditional monetary policy instruments, where the interest rate is fully deregulated, and the provision of reserve requirement such as CRR and SLR, which…
Monetary policy is the macro policy formulated by the central bank to achieve pre-defined objectives primarily through the regulation of money supply and credit supply. So, monetary policy consists of the objectives or goals, targets,…
The terms structure theory shows the relationship between the terms to maturity period of the bond and its yields or interest rate. It means the maturity period of the bond is different, and depending on…
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…