scholarly journals Economic Growth and Financial Sector Development: Long-Run Structural Break Cointegration and Short-Run Equilibrium Relationships in the East African Community

2021 ◽  
Vol 9 (2) ◽  
pp. 48-62
Author(s):  
Muwanga Sebunya Gertrude
Keyword(s):  
Economic Growth ◽  
Structural Break ◽  
Financial Sector ◽  
East African ◽  
East African Community ◽  
Financial Sector Development ◽  
Long Run ◽  
Short Run ◽  
African Community ◽  
Equilibrium Relationships

scholarly journals Inflation and Financial Sector Performance: The Case of Nigeria

2014 ◽  
Vol 7 (1) ◽  
pp. 55-69 ◽  
Author(s):  
R. Santos Alimi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Sector ◽  
Macroeconomic Performance ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Sector Performance ◽  
Definition Of

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.

scholarly journals Determinants of Unemployment in East African Community Countries

2021 ◽  
Vol 06 (10) ◽  
Author(s):  
Mr. Gicharu Stephen Mathenge ◽  
Keyword(s):  
Population Growth ◽  
Significant Relationship ◽  
Foreign Direct Investments ◽  
East African ◽  
East African Community ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
African Community ◽  
Study Population

The purpose of this research study is assessing the relationship between unemployment and its determinants for five east Africa community countries i.e., Kenya, Uganda, Tanzania, Rwanda & Burundi. Particularly, discussed are some economic variables and their significant effects especially in the long run. The study variables include; inflation, GDP growth, population growth and foreign direct investments in relation to unemployment. In order to achieve the research objectives, a methodology framework of panel autoregressive distributed-lag (PARDL) is undertaken. The study finds that a long-run relationship exists among all the variables. Moreover, GDP, POPL, and FDI are found significant to interpret the unemployment in the long-run whereas INF is found insignificant to interpret unemployment in the long-run. The findings also reveal that the tradeoff between inflation and unemployment in EACCs is in the short run and not in the long run. This study concludes that foreign direct investment and gross domestic product have negative and significant relationship with unemployment. Population growth has positive and significant relationship with unemployment and it contributes to unemployment while inflation rate has a positive and insignificant relationship with unemployment. According to the findings of this study population growth is the key determinant of unemployment in EACCs.

scholarly journals Impact of East African Community Integration on Trade: Gravity Model Approach

2021 ◽  
Vol 04 (11) ◽  
Author(s):  
Kiptum George Kosgei ◽  
Keyword(s):  
Gravity Model ◽  
Random Effect ◽  
Parametric Model ◽  
Fixed Effect ◽  
East African ◽  
East African Community ◽  
Long Run ◽  
Short Run ◽  
African Community ◽  
Effect Estimation

East African community (EAC) is a regional economic bloc established to foster economic corporation between Kenya, Rwanda, Burundi, Uganda and Tanzania. Using gravity model the study explores the short run and long run effect of East African community (EAC) on trade using parametric, random effect and fixed effect estimation techniques. Secondly, the study investigates whether formation of EAC led to trade creation or trade diversion in the long run among the member countries of EAC. Lastly, the study establishes the effect of entry of Burundi and Rwanda to the economic bloc of EAC on trade. The study used panel data obtained from the five countries of EAC for the period 1985 to 2019. Breausch Pagan LM test for restrictions in the parametric model and Hausman test for endogeinity in the gravity model found out that fixed effect estimation technique produced accurate and plausible results than parametric and random effect estimation techniques. The empirical results of fixed effect model established that trade across EAC member countries rose by 1.6% in the short run while random effect and parametric models recorded 3.6% increase in trade in the short run. This effect was insignificant meaning that trade between EAC member countries did not expand considerably in the short run. In the long run, fixed effect indicate that EAC increased trade by 24.2% while random effect and parametric model each show that EAC increased trade by 16%. The coefficients are statistically significant at 5% ceteris paribus. Secondly, economic corporation of EAC led to trade creation in Burundi, Kenya, Rwanda and Uganda by 41.6%, 12.2%, 33.9% and 30.1% respectively and trade diversion by 4.2% in Tanzania. Thirdly, entry of Burundi and Rwanda to EAC increased trade of EAC countries by 19.6%. The coefficient is statistically significant at 5% level. The results of random effect and parametric model each indicate a growth in trade by 19.1%. The results of parametric, random effect and fixed effect estimation techniques are all consistent. Lastly, the study established that countries in EAC ought to foster greater growth in GDP, to encourage and strengthen use of common language and to reduce cross border restrictions in order to realize more growth in trade.

scholarly journals Investigating the Relationship Between Financial Integration and Economic Growth in the East African Community

2017 ◽  
Vol 13 (19) ◽  
pp. 249
Author(s):  
Onesmus Mutunga Nzioka
Keyword(s):  
Economic Growth ◽  
Financial Integration ◽  
Positive Impact ◽  
Simple Linear Regression ◽  
East African ◽  
East African Community ◽  
African Community ◽  
Economic Bloc ◽  
Gross Capital Flows ◽  
The Relationship

This study set out to investigate the relationship between financialintegration and economic growth in the EAC community states. Secondarydata on financial integration and GDP was obtained from worldbank and theEast African Community(EAC) community secretariat. The data wassubjected to simple linear regression and correlation analysis to achieve theset objective. The study found that, Gross capital flow to GDP (financialopenness) is positively correlated to economic growth (r=0.2093, p <0.05).The study also found that, 3.98% of the variations in economic growth, asmeasured by GDP per capita, within the countries are explained by financialintegration, as measured by the ratio of gross capital flows, 38.98% of thevariations in economic growth between the countries are explained byfinancial integration while 4.38% of the variations in economic growth of theEast African communityEAC as an economic bloc (considering panel data)are explained by financial integration. The findings confirm that, whencapital flows increase, economic growth also increases, pointing to thenecessity of the East African member states to explore ways of increasing thecapital flows between the countries. The researcher recommends conductingof a comparative study between the old and the new EAC to establishwhether the inclusion of Rwanda and Burundi, has had any positive impact(catalyzed) on the level of financial integration and economic growth.

scholarly journals Impact of banking institutions on national economy an empirical study of time series analysis in Pakistan

2015 ◽  
Vol 4 (4) ◽  
pp. 327-333
Author(s):  
Nouman Badar ◽  
Munib Badar
Keyword(s):  
Economic Growth ◽  
Financial Sector ◽  
Study Data ◽  
Short Term ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Banking Institutions ◽  
Relationship Of

This paper examines the long and short term relationship of financial sector development on economic growth of Pakistan where development of financial sector is detected by the variables truly depicts the efficiency of financial sector i.e. Money Supply, size of Advances, Private sector Credit growth and Bank’s equity with economic growth which is pronounced by Gross Domestic Product in this study. Data of almost 22 years ranges from 1992 to 2013 of overall banking industry is taken to obtain results by employing Johnson and Jusellious co integration technique to detect long run association while Granger Casualty test is used to determine cause and effect relationship and to measure short term dynamics Vector Error correction model is used. The result shows that both long and short run relationship exists between growth of financial sector and economy of Pakistan.

Sustainable Development Goals and Their Implication on Economic Growth

2018 ◽  
pp. 47-65
Author(s):  
Mangasini Atanasi Katundu
Keyword(s):  
Economic Growth ◽  
Sustainable Development ◽  
Sustainable Development Goals ◽  
East African ◽  
Smallholder Farming ◽  
Member States ◽  
The Sustainable Development ◽  
East African Community ◽  
African Community ◽  
Development Goals

The MDGs have been criticised for being too narrow and leaving out many people and their needs, like mental health. Likewise, not all MDGs were implemented successfully in all countries. Some countries implemented one or two MDGs of their choice and left others untouched, others partially implemented all MDGs. It was on this basis that the UN member states met in Rio to frame the Sustainable Development Goals (SDGs). However, in order for the SDGs to address systemic challenges across economic, social, and ecological dimensions of sustainable development they require appropriate institutional support to effectively integrate them into institutions and practices, to coordinate activities, and to mobilize resources for implementation. Rising income inequality negatively impacts economic growth and is threatening sustainable development of East African Community (EAC) member states. Since, the SDGs are many, it is recommended that, East African Member states should adopt a targeted approach in implementing the SDGs and focus on the smallholder farming sector.

Inflation Convergence in the East African Community: A Fractional Integration and Cointegration Study

2015 ◽  
Vol 15 (4) ◽  
pp. 507-524 ◽  
Author(s):  
Hector Carcel ◽  
Luis A. Gil-Alana ◽  
Godfrey Madigu
Keyword(s):  
Monetary Union ◽  
Fractional Integration ◽  
Fractional Cointegration ◽  
East African ◽  
Convergence Hypothesis ◽  
East African Community ◽  
Long Run ◽  
Inflation Rates ◽  
African Community ◽  
Inflation Convergence

In this study we have examined the inflation convergence hypothesis in the five countries that belong to the East African Community and which recently signed a protocol outlining their plans for launching a monetary union within ten years. We check for common patterns in the persistence in the inflation levels. As it is argued in the literature, countries hoping to form a monetary union should present similar inflation patterns. Our study shows that the inflation rates in these countries present orders of integration equal to higher than one in all cases, confirming that shocks will most certainly not recover in the long run. Moreover, fractional cointegration relationships are also found across all the countries with the exception of Tanzania, suggesting that this country displays a different pattern compared to the remaining four, presenting also some evidence of a break in the data.

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