Keshab Bhattarai

• SFHEA (UK). Post-Doctoral Research (Warwick); PhD (Economics, NU-Boston, US); MA ISS, Hague, Netherlands; MA, TU, Kathmandu, Nepal; BL (TU)
• Senior Lecturer at University of Hull

Abstract: Values of marginal propensity to consume (MPC) are statistically different across rural and urban areas, geographic regions and over time in China. At macro level, similar inverse U-shape patterns are found in MPCs of rural and urban residents between 1980 and 2000. The gap widens in them since then. At micro level, rural and urban MPCs a...

In examining the role of institutions in resisting corruption and its impact on growth, most studies concentrate on the aggregate level and conclude that sound institutions enhance growth. We focus instead on varying dimensions of heterogeneous institutions in the presence of corruption and their interactive effect on stock returns in four emerging...

In examining the role of institutions in resisting corruption and its impact on growth, most studies concentrate on the aggregate level and conclude that sound institutions enhance growth. We focus instead on varying dimensions of heterogeneous institutions in the presence of corruption and their interactive effect on stock returns in four emerging...

Empirical evidence is found for the β and σ convergence towards the steady states of labor productivity across provinces and production sectors in China based on estimates of static, dynamic and quintile panel data models. The pattern of convergences is found to be asymmetric across sectors according to quantile panel regression estimations. The pa...

This paper empirically investigated the evolution of market concentration in Ghana. It tests market competitiveness in banking systems post financial sector reforms. Using unbalanced panel data of 24 banks in the period 2003-2012, a period characterized with deregulation, liberalization and consolidation of the banking sector in Ghana. Market conce...

A reform in the personal income tax (PIT) is helpful in reducing inequality in the distribution of income and consumption in both short and long terms in Thailand. It boosts private consumption, investment, employment, capital stock, exports, imports and GDP. Output, employment and capital stock in every sector grow faster with the reforms in the p...

Natural endowments and economic growth are often connected. However, this relationship is still controversial. Although natural resources are crucial for economic growth, there is a kind of puzzling in their relationship. For the oil-based economies, the negative impact becomes clear. This paper explores how far extracting oil and using its revenue...

Advanced and emerging economies are becoming more interdependent with rapid pace of globalization of capital markets and technological innovations in recent years. We examine whether technology and monetary policy shocks get transmitted between advanced and emerging market economies and to what extent they generate complementary or competitive effe...

In examining the role of institutions in resisting corruption and its impact on growth, most studies concentrate on the aggregate level and conclude that sound institutions enhance growth. We focus instead on varying dimensions of heterogeneous institutions in the presence of corruption and their interactive effect on stock returns in four emerging...

Nepal made significant progress in removing monarchy and terrors of Maoists in the last decade. It however lacks a stable solution for speedier economic growth and development as the major political parties are still struggling to institutionalize the new political framework set up by the new constitution of Nepal that was promulgated by the Consti...

FDI contributed positively to sales, profit, employment and wages of firms in India from 2004 to 2018. Foreign capital is complementing domestic capital well embodying technology and innovations required for expansion of domestic firms in it. Foreign promoters have played quite significant economic roles among firms across production sectors in man...

After the seminal work of Nickell (1981), a vast literature demonstrates the inconsistency of ‘conditional convergence’ estimator in income‐based dynamic panel models with fixed effects when the time horizon (T) is short but the sample of countries (N) is large. Less attention is given to the economic root of inconsistency of the fixed effects esti...

In this paper, a computable general equilibrium model of Thailand is constructed in order to assess economy-wide impacts of reforms in the value added tax (VAT) and corporate income tax (CIT) on welfare and reallocation of resources across production sectors in the Thai economy. The model was calibrated to the micro-consistent benchmark data set co...

The study applies a multi-sector multi-household static computable general equilibrium (CGE) tax model to assess the economy-wide impacts of taxes in Vietnam. It examines two tax reform scenarios based on the tax reform plan proposed by the Vietnam Ministry of Finance. The first scenario is increasing the value-added tax (VAT) rate to 12% from the...

Impact of the Oil-sourced funds on economic growth in Oil-rich economies

Impact of the Oil-sourced funds on economic growth in Oil-rich economies

p>A structure of the statistical tests motivated by Cromwell, Labys&Terraza^[23]has been used to build linear and nonlinear predictability models.Most importantly, the variance ratio test and that of AR-GARCH model is used to test the dual hypotheses of the random walk and efficiency in stock markets. Whilein all or nothing condition of m...

This paper analyses the Taylor rule and its application to monetary policy in the United Kingdom and Euro area. The analysis uses a linear regression on quarterly economic data from 1993Q1 to 2017Q4 for the United Kingdom and 2000Q1 to 2016Q4 for the Euro area. The results show that the Taylor rule does not fully describe the monetary policy action...

Exchange rate misalignments has attract a significant attention especially in developing economies; Libyan economy has witnessed a major economic and political changes. Libyan exchange rate has been changed specifically after 2000, and political instability after 2011. This paper aims to shed a light on the equilibrium real exchange path to obtain...

Abstract: Growth and fluctuations in the Libyan GDP depend on oil prices and oil revenues. With data on oil revenues, GDP, capital and labour inputs spanning more than five decades we find that labour has been the most important source of growth of the per-capita income in Libya over this period. While the role of capital accumulation has been less...

Hillary Clinton and Donald Trump, the Democratic and Republican candidates for President of the U.S. in 2016, proposed several changes in the federal tax code. Hillary Clinton would add a personal income tax surcharge of 4% on high annual incomes, limit the tax benefits of non-charitable deductions, set a minimum tax rate of 30% on taxpayers earnin...

The two major candidates in the 2016 presidential election made sharply different proposals for reforming the Federal tax code. Donald Trump proposed cutting taxes to provide "tax relief for middle-class Americans", and lowering corporation taxes to boost economic growth, while Hillary Clinton proposed modest increases in taxes on high-income Ameri...

Opinion leaders and policy makers in the United States have turned their focus to the corporate income tax, which now has the highest statutory rate in the developed world. Using a dynamic computable general equilibrium model (the “NCPA-DCGE Model”), we simulate alternative policies for reducing the U.S. corporate income tax. We find that reduction...

By equalizing rates of return across sectors, financial liberalization improves efficiency and equalizes the distribution of income. Efficiency gained in the allocation of resources increases capital usage more in previously heavily repressed sectors such as agriculture and textile, allowing up to a 19 percent expansion in production and employment...

This paper develops and estimates a new-Keynesian dynamic stochastic general equilibrium (DSGE) model for the analysis of fiscal policy in the UK. We find that government consumption and investment yield the highest GDP multipliers in the short-run, whereas capital income tax and public investment have dominating effect on GDP in the long-run. When...

Inflation and unemployment reduce welfare of individuals and should be as low as possible in any economy. Cointegration and Granger causality tests suggest that there are long run relations between these two variables among the OECD economies. While rates of unemployment vary significantly among these economies, rates of inflation have stabilised a...

By replacing the current income tax with a national sales tax, the FairTax proposal would end the double taxation of saving inherent in the existing tax code and, by doing so, raise output, employment, investment and capital stock relative to the benchmark economy. While these positive effects would be felt almost immediately, the FairTax is very m...

Dynamic multi-sectoral and multi-household general equilibrium models are constructed to show how the economies of Germany, France, Spain and the United Kingdom will evolve from 2006 to 2090. These models generate dynamic paths of investment and capital accumulations, demand and supply across production sectors, consumption and welfare of household...

Foreign aid from the donors may or may not raise growth rates in receiving countries. In general they may increase investment but if the amount of aid is associated with conditionality of exports, that will have negative impacts on growth rates. Simulation of the analytical model shows that if TFP grows faster in the recipient countries more than i...

This is a review on the functional and size theories of income distribution in the context of growing inequality around the world. Causes for the observed patterns of declining shares of labour and increasing share of capital income in the classical, neoclassical, Marxian, structuralists or general equilibrium theories are reviewed. Each of these t...

Nepal has lagged behind a lot in growth and development process It should adopt strategies of growth looking at the experience of India and China and other advanced countries such as the UK and the US. This requires a policy of investment in physical and human capital and technology. Macroeconomic stability, balanced trade, development of infrastru...

This monograph presents major elements of advanced micro-economic models for systematic thinking about the working of modern markets. Problems of consumers and producers are analysed concisely in partial, general equilibrium and game theoretic frameworks relating them to the micro level decision making processes with due consideration on the struct...

This workbook aims to present basic econometric methods that economists have developed over years for testing various propositions of standard economic theories. It focuses on basics of OLS estimators, their applications, problems including multicollinearity, heteroskedasiticity and autocorrelation and remedial measures, unit root and cointegration...

Multinational corporations [MNCs] usually engage in foreign direct investment [FDI] to take cost advantages of producing abroad to negate the need for licensing or subsidiary production. At the macro level, FDI accounts for signi…cant proportions of MNCs total investment and has discernible impacts on economic growth. This is shown theoretically in...

Econometric techniques are changing very rapidly along with developments in economic theories. Advanced level of economic analysis requires training in advanced econometrics. Most important theoretical developments in econometrics including fundamental techniques required for specifying, estimating, testing and applying sophisticated time series, c...

This workbook contains a concise presentation of the classical, Keynesian, real business cycle, new Keynesian and DSGE models for closed and open economies that are often applied in analysis of fiscal, monetary, financial, and labour market policies. It contains general equilibrium models for comparative static and dynamic analyses policies and oth...

This monograph aims to present concisely the major elements of popular macroeconomic models for systematic thinking about the modern economies. It contains detailed derivations of classical, Keynesian, new Keynesian, new classical models and open economy and structural models used for analysing short run fluctuations and long run growth. Tutorial p...

Multinational corporations (MNCs) usually engage in foreign direct investment (FDI) to take cost advantages of producing abroad to negate the need for licensing or subsidiary production. At the macro level, FDI accounts for signi…cant proportions of MNCs total investment and has discernible impacts on economic growth. This is shown theoretically in...

Income and income inequality increased substantially in the UK during the industrial revolution. Income inequality was the highest around 1880.This triggered enactments of more egalitarian tax and transfer system, which halved income inequality by the 1960s. Inequality has risen again with fiscal system reforms in the last five decades. By analysin...

The core of Shapley–Shubik games and general equilibrium models with a Venn diagram is applied for a theory on the role of real finance in economic growth among advanced economies. Then the dynamic computable general equilibrium (DCGE) models for Germany, France, the UK, Japan and the USA are constructed to assess the validity of the over-financing...

This workbook shows how to use economic theories, statistical and econometric methods for conducting research to find answers to puzzling issues in modern economies. How to test predications of models based on theoretical analysis from optimising models in micro or macro, finance or business related fields of economics using empirical evidence usin...

While over-financing caused crises and slow growth in advanced economies including Germany, France and the UK after 2008, more prudent financial deepening sustained higher economic growth in China and India—two major emerging economies in the world. The actual financial deepening ratios (AFDR) observed in the non-consolidated balance sheet from the...

With a dynamic computable general equilibrium model with Pissarides and Mortensen and Pissarides type equilibrium unemployment, impacts of tax-transfer programmes are assessed for the UK. The model contains more desirable structure of households and production sectors and includes more type of shocks in preferences, technology, trade and policy ins...

With a dynamic computable general equilibrium model with Pissarides and Mortensen and Pissarides type equilibrium unemployment, impacts of tax‐transfer programmes are assessed for the UK. The model contains more desirable structure of households and production sectors and includes more type of shocks in preferences, technology, trade and policy ins...

The cash in advance and money in utility function models are used to examine whether the nature of fluctuations in economic activities and welfare in three interdependent economies are related to the stocks and growth rate of money. When the money is exogenously introduced in the form of cash in advance, it serves as a medium of exchange and the ra...

Huge gaps exist and are widening between the rural and urban income and consumption across 32 provinces of China despite very impressive rates of growth of GDP in the last three decades. By pursuing rapid urbanisation and export oriented strategies Chinese policy makers seem to have switched away from the equality oriented linear model of optimal c...

A concise knowledge of theories and models of economic growth, finance, fiscal and monetary policies, input-output and general equilibrium analysis, trade and exchange, cooperative and non-cooperative games, bargaining, signalling and mechanism design under asymmetric information is required for evaluation of economic decisions made by households,...

Ricardian dynamic general equilibrium analyses show that under free trade arrangements a low income country with lower wage cost and large endowment of labour has comparative advantage in trade. Efficiency gains from this enhance economic growth and welfare of households simultaneously in both low income and advanced economies. Theoretical predicti...

A surprising cross country stylized fact is that a higher public spending on education tends to lower the long run per capita growth rate and schooling returns. This is contrary to the conventional wisdom that education is a major driver of growth. In this paper, we revisit this issue and try to understand these puzzling facts in terms of an endoge...

A significant positive relationship exists between the ratios of trade and educational spending to gross domestic product, implying that countries which are more open on the trade front also spend more on education. An open economy endogenous growth model with human capital is developed to understand this stylised fact. The model predicts that coun...

This research was conducted to study growth trends and sources of output growth in Nigeria with a focus on oil palm and groundnut production from 1961-2007. The period was delineated into the following sub periods, to take into account various policy regimes: 1961-1969, 1970- 1985, 1986-1993 and 1994-2007. Objectives of the study were to estimate g...

Impacts of fiscal and monetary policies are assessed in an open economy two sector multi‐household general equilibrium tax model with money for South Asia. Despite impressive growth rates there is evidence for alarming gaps in the distribution of income among households that require very careful design of economic policies. Generally the impacts of...

Growth rates, inflation and interest rates are determined simultaneously in the UK. Depreciations of Sterling pounds contribute to the growth by enhancing international competitiveness. Inflation from the growth of money, depreciation of Sterling and higher interest rates, impacts adversely on it. London being a hub of the global financial market h...

Nepalese students in UK are struggling to balance tuition and other expenses in the short-run and for the gainful employment in the long run. The opportunity cost of emigration in a labour surplus economy of Nepal is very little in comparison to benefits from increased flow of remittances, transfer of knowledge, ideas and technologies. Net emigrati...

Trust from one group to another is vital for a success of a coalition. Coalition breaks down when such trusts disappear. It is possible that no group or coalition could be formed again to get the required majority. Situation may result in a Nash limbo indecisive state undesirable to every-one. No solution seems apparent because of conicts of intere...

Comparative analysis of economic structure and forecasts generated from simultaneous equation, VAR and autoregressive models based on quarterly series from 1966:1 to 2007:3 of UK to those from the stochastic general equilibrium models has provided insights into objective and subjective evaluation of macro economic impacts of public policies. Econom...

This is a workbook for emperical economics module. Main aim here is to present basic econometric methods that economists have developed over years for testing various propositions of economic theory. This version focuses on basics of OLS estimators, their applications, problems including multicollinearity, heteroskedasiticity and autocorrelation an...

Multinational corporations [MNCs] usually engage in foreign direct investment [FDI] to take cost advantages of producing abroad to negate the need for licensing or subsidiary production. At the macro level, FDI accounts for signi…cant proportions of MNCs total investment and has discernible impacts on economic growth. This is shown theoretically in...

The National Health Service (NHS) in UK prescribes 210C in the living room and 180C in other rooms for all households but for more than 7.7 percent households cost of heating is above 10 percent of their income and they suffered from coldness related diseases and are in fuel poverty. Raising growth rates of income of vulnerable households, stabilis...

This chapter analyzes how rapid urban growth in the Kathmandu Valley has increased urban vulnerabilities. This study uses aerial photos, cartographic maps, satellite images, and aspatial data on GIS platforms to evaluate vulnerabilities associated with the Valley's extremely rapid urban spatial growth from 1955 to the present-2008.We also analyze u...

Using the two-household (high and low-wage) case for illustrative purposes, we consider a model with a single commodity (consumption good) and two labour (leisure) types. Distorting income taxes collected from the high-wage household finance transfers to the low-wage household. In the presence of a household income tax at rate t1, a transfer progra...

Impacts of redistributive taxes on inter-cohort and intra-cohort in-come inequality are generated by long-run responses in precautionary savings and bequests. In a life-cycle overlapping-generations model with earnings risk, uncertain lifetime and nonaltruistic bequests, the long-run income inequality results from the dynastic accumulation of idios...

Abstract A signi…cant positive relationship exists between,the trade share and educational spending,to GDP implying,that countries which are more,open on the trade front also spend more,on education. An open,economy,endogenous,growth,model,with human,capital is developed,to understand,this stylized fact. The model,demon- strates that countries with...

Abstract A signi…cant positive relationship exists between,the trade share and educational spending,to GDP implying,that countries which are more,open on the trade front also spend more,on education. An open,economy,endogenous,growth,model,with human,capital is developed,to understand,this stylized fact. The model,demon- strates that countries with...

Since human capital is a major driver of growth, the conventional wisdom suggests that the government should direct more resources to education. However, surprisingly the cross country data show little positive correlation between growth and public spending on educa- tion. In fact, the pattern is rather puzzling. The public spending on education te...

Impacts of financial deepening on economic growth are examined with conventional financial asset GDP ratios, Shapley-Shubik core and general equilibrium modelling. It focuses on simultaneity between them rather than one way causation as found in the traditional McKinnon-Shaw analyses. General equilibrium results approximate the allocations for mark...

A general equilibrium model with unemployment is developed to evaluate the cost of equilibrium unemployment in an economy by comparing responses to policy changes in equilibrium unemployment economy to the full employment equilibrium economy. Model can assess the cost and benefits of unemployment and transfer programmes. Analysis of impacts of unif...

Four different versions of the macroeconomic models popular in policy analysis are specified and numerically implemented. Each provides a framework to experiment fiscal, monetary and trade policy issues for a small open economy or for economies that are interdependent in the global economy. Simulations and non-linear optimisation techniques are emp...

Transformation from feudalism to full fledged liberal democracy is proving a very difficult transition despite very successful election for the Constituent Assembly and declaration of the Republic of Nepal on May 28, 2008. New constitution should promote politics of reconciliation based on broader national interest removing the possibilities of con...

This paper finds empirical support for a Taylor (199356. Taylor , J . 1993. Discretion versus policy rules in practice. Carnegie Rochester Conference Series on Public Policy, 39: 195–241. [CrossRef]View all references) type interest rate determination rule. The model is solved analytically, estimated and used for simulation, impulse response analy...

Economists use static, dynamic, gametheoretic and econometric models to analyse various important policy issues. Techniques of analysis vary to some extent by the nature of questions asked for or the depth and comprehensiveness of answers required. I have tried to put together some articles that I have written in the past few years as an illustrati...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

Incentive compatibility in poverty alleviation game for the most efficient and just allocation of resources and maximisation of social welfare requires cooperation from both rich and poor households, governments and the global community. Noncooperation among them only deepens poverty with socially, economically and morally unacceptable magnitudes o...

This module aims to train students in thinking and explaining how the economy works using popular models in economics. It builds on the foundations laid in Microeconomics, Macroeconomics, and Empirical Economics. It provides essential background to independent study and dissertation modules in their third year and to become professional economist a...

How economic agents with conflicting interests can analyse gains from bargaining, coalition, signalling and repeated games and how their pivotal positions influence the outcome of the game is illustrated using numerical examples. Dynamic Poverty game is proposed for alleviation of poverty that requires cooperation from tax payers, transfer recipien...

A multisectoral dynamic general equilibrium tax model with and without announcement effects for open and closed capital markets is used to evaluate efficiency gains and transitional effects from equal-yield tax reforms for seven different taxes in the UK economy. Impacts of an unanticipated tax reform on investment, capital accumulation, output and...

Nepal went through series of conflicts and troubles in last 60 years. These are caused by lack of clarity and implementation of growth and redistribution policies aimed at reducing poverty. Non-cooperation among competing political and economic forces has brought Nepal into crisis and growth disaster. The major reason for conflict was the shortsigh...

A multisectoral dynamic general equilibrium tax model with and without announcement effects for open and closed capital markets is used to evaluate efficiency gains and transitional effects from equal-yield tax reforms for seven different taxes in the UK economy. Impacts of an unanticipated tax reform on investment, capital accumulation, output and...

Impacts of taxes and spending on accumulation and growth are assessed theoretically using neoclassical, optimal growth and overlapping generation models. Empirical supports based on rank correlation and panel regression analysis suggest that countries with higher tax GDP ratio generally had lower growth rates compared to others with lower ratio in...

If two disjoint country service networks involving a small and large country are connected as part of international liberalization in the presence of network externalities, the per capita gain for the small country from access to a large network will be large, and the per capita gain for the large country will be small. In contrast to goods, the be...

Macroeconomic impacts of consumption and income taxes are higher when both of them rather than only one of them are employed to raise a fixed amount of revenue that is given back to households as transfers. We apply a general equilibrium model to assess no tax, only consumption tax or only labour income tax policy alternatives in comparison to a be...

Alleviating the level of poverty -the problem of malnourishment, hunger-disease-illness, illiteracy, lack of education and skills -has remained one of the major policy issues in the UK and other OECD economies in the last century and many developing economies in the last five decades. This paper assesses theoretical contribution in measurement of p...

This paper reviews the Keynesian IS-LM model and the neoclassical and endogenous economic growth models that are widely used in analysing fluctuations of output in the short run and economic growth in the long run. Numerical examples are provided to evaluate impacts to fiscal and monetary policy measures on aggregate demand with a sensitivity analy...