Kushal Pens

Dosa Economics During his three year tenure as the governor of RBI, Dr. Raghu Ram Rajan focused on lower inflation over higher interest rate. Rajan theory famously known as DOSANOMICS. He explained the concept with the use of interest in pension fund with relation to increase in general price level. If a pension has savings of rs. 100000 and the cost of dosa is rs. 50 at the time, he can buy 2000 dosas with that money. As a rational being a pensioner wants to invest for a period of one year to make extra more sum. Lets look at scenario: Inflation: 10%                   Interest: 10% At this rate, pensioner will get rs. 10000 as interest after a year in savings. But, cost of dosa is now at rs. 55. He can only buy 182 dosas with earned interest. Again, Inflation: 5.5%                Interest: 8% At this rate, pensioner will get rs. 8,000 as interest after a...

What is mean by purchasing power parity theory whch is widely considered as kind of foreign exchange rate? The purchasing power parity theory has been popularized during the inter-war (world war 1, year 1918) period by Gaustav cassel , the swedish economist. Also, called PPP Theory widely. According to this theory, rates of exchange between two countries are determined by relative price level. The actual rate of exchange must be such that same amount of purchasing power should be same in both countries. For e.g. If by spending NPR 110/- we can buy an amount of goods in Nepal as we can buy with USD 1/- in America will be NPR 110/- to USD 1/-. Hence, the rate of exchange determined in relation to price level is known as purchasing power parity. (Source of image is internet) Determination of exchange rate under PPP Theory The PPP Theory is determined by comparing general price level.  Note, not the price level of internationally traded goods. Prices of ex...

On the basis of cost of production explain the international trade focusing more on David Ricardo's' Comparative cost advantage theory? Comparative cost advantage theory was propounded by 18th Century economist David Ricardo which is attributed in his work "Principles of Political economy and Taxation" published in 1817 AD. Latter J. S. Mill, Cairns and Bastable developed the concept. American economist Prof. Taussing and German Prof. Haberier sophisticated and refined it.  Comparative cost advantage theory is more than absolute cost advantage theory. Hence, it is revised and improved version of Adam smiths' absolute cost advantage theory. According to this theory, the cost of production of same good varies in different nation as a result of peculiar environment, way of living, culture and tradition, topography and human specialization than in other nation. Due to difference in cost of production of same goods in different country, a country will ...

Modern Quantity theory of money The concept of modern quantity theory of money is developed by Prof. Milton Friedman in his essay "The Quantity Theory of Money- A Restatement". He defended the concept of the fisher quantity theory of money with his revised version at the point of time where Keynesian concept of monetary was leading the thoughts. He put-forward his new demand function. Friedman viewed that the money demand function is most stable function in the economy. People demand money because it is considered as a wealth. A part of money is held by people parting a portion for investment in capital assets. For firms demand for money is considered as capital goods which when combined with other factors of production leads to the production of goods and services. In nutshell, Firms demand for money- as capital goods Individual/people demand for money- as durable consumer goods, hold money in form of BFIs savings and capital assets like, equity and bonds...

Famous book list from renowned economist Economics is known for study of optimum usage of resource which limited addition in nature to bring perfect distribution among the living stakeholders of the society. Norwegian economist Ragnar frisch (first Nobel price winner in economics, 1969) coined the term "Micro" and "Macro" with concept of "econometric" in economics in 1933. Every idea in economics is either termed with micro or macro economics. From the point of political-economic system of a country the environment of economic well-being is found prevail in three either way. a) Pure capitalism: Ownership in private property, free movement, fair competition and minimal or no intervention of government found under this political-economic system. Great faith in self interest of human being kept here and believed that things/resources gets assigned automatically where it is most necessary. European nations and USA are known for this system of e...

In law of variable proportion theory there are three stages of production, which stage can be considered ideal stage to producer for continuing the production? Why other stage is not suggested ? The concept of three stages highlighted in Prof. Dr. Alfred Marshal initiated majorly with other classical economist theory of variable proportion here we use a figure. (Figure is taken from internet for reference) In the given figure, TP is shown rise from convex to concave, remains still for short period and falls down with the increase in additional unit of labor. The nature of average production, marginal and total are outlined under in three different stages as shown in the figure above. A. Stage I: This stage starts from the origin (0) and ends at the point where AP is maximum or point where MP and AP is equal to one another. The common nature of this stage is: a. TP increases at increasing rate up to the point where MP is maximum and then increases at decreasing/...

The timeline of Nepalese budgetary system in ascending order.  Reader have to keep in mind, the dates or FY metioned below is in B.S. (Bikram Sambat) which is fifty seven years faster than A.D. approximately. (source of image is internet) Prime minister under whom budget was firstly introduced Matrika Prasad Koirala Finance Minister who announced 1 st budget from Radio Nepal amounted cost of Nepalese rupee 5.25 crore Subharna Shumsher JBR on 21 st Magh, 2008 BS Fiscal year onward altered from starting 1 st baisakh to Last chaitra to starting 1 st shrawan to last ashad FY 2009/10 onward The process of classifying budget according to its performance started in Nepal FY 2009/10 onward Public budget of Nepal divided into General and Development budget FY 2013/14 onward Budget of Nepal presented in Unitary Currency (Nepali), previously it Indian currency also used to get space in cu...