Inflation in Nepal

A large number of studies in Nepal have been conducted to identify the factors responsible for inflation based on the different theories of inflation. Although these studies provide insight into the determinants of inflation in the country, there remain some unanswered questions: • Can inflation in Nepal be explained by the theoretical models as specified earlier? Does a single model or combination of models require explaining the influencing factors of inflation in Nepal? • Utilizing the perspective of the model, what kind of relationship can be detected from historical inflation data? Is there long-term or short-term relation? • What is the possible impact of these relationships on policy formulation with regard to inflation in the country? The present study is a modest attempt to answer these questions. The basic objective of the study is to identify the factors influencing inflation in Nepal. [NRB Research Report].