Unemployment and Economic Growth in Nepal: An ARDL Bound Test Approach

Mr. Kashi Nath Khanal, Mr. Rajesh Gupta


The relationship between unemployment and economic growth is one of the most pressing problems facing by Nepal over the past few years. It is important for economist, policy makers and for other as well. This study aims to examine the relationship between unemployment and economic growth for Nepal over the period 1991 to 2017 using economic growth, unemployment, inflation, rainfall, growth rate of population, government investment, and foreign direct investment as a determinant. The major objective of the study is to examine the impact of unemployment on economic growth in context to Nepal. Data are collected from the authirized source of the government bodies and agencies. The unit root test (ADF test) of the study results indicates that the variables have different integration order. Subsequently, the bound testing (ARDL) approach and ECM-ARDL Model are applied in order to examine the long run and causal relationship between the variables

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