Abstract
This article examines long-term relationship between life insurance and economic growth in Nepal. The study includes GDP and money supply as macroeconomic variables and life insurance premium as insurance industry variable. Annual data has been taken for 31 years (1983-2013) and Vector Error Correction Model has been employed to observe the long term relationship. It has been found that time series data has unit root in level but in first difference all three data set found no unit root. The study concludes that GDP, life insurance premium and broad money supply (M2) have long run relationship.
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