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Macroeconomic Effects of Economic Policy Uncertainty: Evidence from Nepal

Author

Listed:
  • Birendra Bahadur Budha

    (Nepal Rastra Bank)

  • Rohan Byanjankar

    (Nepal Rastra Bank)

  • Swostik Nepal

Abstract

This paper investigates the effects of economic policy uncertainty on the Nepali economy. We construct an economic policy uncertainty index for Nepal based on publicly available, real-time Google Trends data for the period from January 2011 to April 2026. We find that an increase in policy uncertainty reduces GDP, imports, private sector credit, and the stock market index.

Suggested Citation

  • Birendra Bahadur Budha & Rohan Byanjankar & Swostik Nepal, 2026. "Macroeconomic Effects of Economic Policy Uncertainty: Evidence from Nepal," NRB Working Papers 65/2026, Nepal Rastra Bank, Economic Research Department.
    • Handle: RePEc:nrb:wpaper:nrbwp202665
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    Keywords

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • F10 - International Economics - - Trade - - - General

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