A STUDY ON FACTORS INFLUENCING INFLATION WITH REFERENCE TO THE NEPALESE ECONOMY

Abstract

Inflation is generally and wherever a money related peculiarity and it is a strangely delicate issue in macroeconomics. It is the most discussed issue all over the world among policy makers and academia. This is because of the fact that its effects are widespread and severe and the impacts are far reaching. This study includes a comprehensive analytical outlook on the selected macroeconomic variables and their relation with Nepalese inflation during the period 1990-2020. Moreover, the issue of inflation is still debatable as it includes a multitude of factors, so it needs more updated information. This study has done a rigorous analysis to update such information with new variables like rice production. This study finds that remittance; annual rice production and control of variable foreign exchange rates have positive relations with inflation. Furthermore, this study has implications for policy makers to develop their findings and decisions in a more adequate, structural and measureable manner to understand the effect of inflation for further economic stability of the Nepalese economy.