Nexus between Exports Dynamics, Inflation, Exchange Rate Volatility, and Economic Stability

Evidence from SAARC Countries

Authors

  • Janga Bahadur Hamal Saraswati Multiple Campus, Tribhuvan University, Nepal Author
  • Dilli Raj Sharma Saraswati Multiple Campus, Tribhuvan University, Nepal Author
  • Narayan Prasad Aryal Saraswati Multiple Campus, Tribhuvan University, Nepal Author
  • Gobind Kumar Singh Saraswati Multiple Campus, Tribhuvan University, Nepal Author

DOI:

https://doi.org/10.32674/kcqwpf74

Keywords:

Dynamic ordinary least squares, economic growth, exchange rate, Export, fully modified ordinary least squares, inflation

Abstract

Purpose: This study investigates the integrated role of export dynamics, inflation, and exchange rate volatility on long-run economic growth in SAARC countries.

Design/methodology/approach: The study employed annual panel data spanning 1990 to 2024 for six SAARC economies. FMOLS and DOLS estimators were utilized to obtain long-run coefficient estimates, and a fixed-effects model was employed to capture country-specific heterogeneity.

Findings: Exports have a significant and positive impact on economic growth, while exchange rate fluctuation shows a strong positive long-run effect. Inflation does not show any statistically significant relationship with GDP. Cointegration results indicate that external-sector variables jointly determine long-run growth behavior.

Conclusion: Export growth and exchange rate movements strongly influence economic growth in SAARC countries. This suggests that the region's long-term economic performance depends largely on the strength and stability of its external sector, whereas inflation does not show a meaningful long-run effect.

Implications: The study implies that fiscal space for social security depends on export competitiveness, trade diversification, and exchange rate stability, while long-term growth is driven mainly by structural reforms, productivity, and regional cooperation.

Originality/value: It contributes original and updated evidence on how export performance and exchange rate dynamics influence long-run growth and support social security.

JEL Classification: E31, F14, F31, O47

Author Biographies

  • Janga Bahadur Hamal, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Janga Bahadur Hamal is an Assistant Professor at Saraswati Multiple Campus, Tribhuvan University, Nepal. He holds an M.Phil. degree in Finance from Tribhuvan University. With over a decade of teaching and research experience, his academic interests lie in financial management, behavioral finance, and organizational management.

  • Dilli Raj Sharma, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Dilli Raj Sharma is a Professor of Finance at Central Department of Management, Tribhuvan University, Nepal. He served at Faculty of Management, Tribhuvan University as Dean for two consecutive terms. He holds a PhD degree in Finance from Tribhuvan University. With over two decades of teaching and research experience, his academic interests lie in financial management, behavioral finance, and general management.

  • Narayan Prasad Aryal, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Narayan Prasad Aryal is an Assistant Professor at Saraswati Multiple Campus, Tribhuvan University. He earned his MBA in Finance from Tribhuvan University. With over a decade of academic engagement, his teaching and research focus on human resource management, organizational studies, and business administration. Mr. Aryal is a published author who has written several articles and books.

  • Gobind Kumar Singh, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Gobind Kumar Singh is a Faculty Member at Sarasawti Multiple Campus, Tribhuvan University. With keen interests in teaching and research, he has been actively involved as a course facilitator and researcher in academia. His areas of interest in research include business administration, financial economics, human resources, and quantitative social research.

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Published

2026-07-26

Issue

Vol. 9 No. 1 (2026): Journal of Insurance and Social Security

Section

Social Security, Protection, and Inclusion

License

Copyright (c) 2026 Janga Bahadur Hamal, Dilli Raj Sharma, Narayan Prasad Aryal, Gobind Kumar Singh (Author)

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