Rajan Silwal

The Causes of Trade Deficit of Nepal: an Exploratory Analysis Rajan Silwal

Nepal has been experiencing a continuous trade deficit over the decades. For some economists, trade deficit, in itself, is not a problem. They argue that when an economy makes a big investment or when people consume more than they nationally produce, a trade deficit takes place. However, a prolonged trade deficit in any economy cannot be perceived as a healthy sign. An economy can hardly sustain an unceasing trade deficit. This book has explored the principal causes of trade deficit in Nepal which are likely to be common in many countries. The author has been able to explore the root causes without applying any sophisticated econometric models. His findings are distinct in simple line graphs. The research has been built above a sound theoretical foundation. Undoubtedly, this book is successful in explaining why a trade deficit is viewed as a problem against those who do not take it as a serious phenomenon under given circumstances. Leaving enough ground for econometricians, this book challenges the conventional understandings regarding the general causes of trade deficit.