Posted by: mickthesick May 24, 2006
Nepalese Economy In South Asia
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.Here we go again guys. As to Bibas's inquiry about why I used the U.S. GDP, the reason why I used US GDP was becuse Nepal exports huge amounts of products to the U.S. But we all know that India is Nepal's biggest exporting destination. But then we also know that most of the trade done with India doesn't have official statistics and data which I could use in my study. So I had to go with the second most popular exporting destination: the U.S. Also, I ran my regression excluding the U.S. GDP and my Durbin Watson fell from 1.93 to 0.73, which means it was actually a "valuable" statistical data, not in the sense that it itself explains the movement in Nepali GDP, but in the sense that it works "well" with the other variables of my data. I am confident that the GDP of India works better than the US GDP. I will consider your suggestion, and find the Indian GDP for those years and include in my regression. Let's see if that gives me better results. My data ranged from 1962 to 2004. Not all of the data covered all those periods. There were some data that were not applicable for all the years covered, for example, the Maoist War, which started only in 1990. And yes, the data for DEM and WAR were dummy variables. 1 for "yes" and 0 for "no". As for Bibas's idea of including the "inflation", I thought about it at the time of research. But I could not find good data on Nepali inflation for the time period I covered. So, I instead used the inflation adjusted GDP change in my data. So, the GDP I used in my research is not actually the dollar or rupees amount GDP, it is the percent change in adjusted GDP. That should have covered for the "inflation".
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