Effect of Open Market Operations on Income Inequality
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 08
Abstract
Inequality is particularly relevant for public debates on the disaggregate implications of economic policies since they might have distinct effects across different segments of the population. Impact of monetary easing on inequality have recently attracted increasing attention especially in developing countries. This article examined the effect of open market operations on income inequality in Kenya. A quantitative research design method was adopted. The study utilized a quantitative cross-sectional data from the Kenya Continuous Household Survey Programme (KCHSP) for the years 2020 and 2021. Stepwise regression, forward selection model was executed with a threshold of 0.2. Further, the study was supported by Permanent Income Hypothesis, Kuznets Hypothesis and the modernization theory. Income inequality, measured by the Gini coefficient, was the dependent variable. Open market operations (repo, and reverse repo) was the independent variable in the model. The male headed households had a Gini coefficient of 0.58 while a Gini coefficient of 0.59 was attributed to female headed households, across the 47 counties. The results showed that open market operations (reverse repo) had a coefficient of 0.022, p=0.026< 0.05 which was positive and statistically significant at 5% level. The findings indicate that in order to effectively manage income inequality in the country, policymakers should adopt an interdisciplinary and multifaceted approach. This approach should take into account the differential impacts of various policy instruments on income distribution, with a particular focus on demographic segmentation. Additionally, policymakers should combine careful adjustments to monetary policy with targeted social and fiscal measures. These measures should be continuously informed by rigorous data analysis, with the aim of fostering a more inclusive and equitable economy.
Authors and Affiliations
William M. Njeru , Elvis M. Kiano , Richard K. Siele,
Keywords
Related Articles
- EP ID EP743449
- DOI 10.47191/jefms/v7-i8-56
- Views 49
- Downloads 1
Analysis of Poverty Level and Income Inequality of Vegetable Farming Households in Ngadirejo Village, Pasuruan District
The high production of vegetable commodities in Ngadirejo Village, Tutur District, Pasuruan Regency is not comparable to the level of welfare of vegetable farming households. This study aims to identify the various sourc...
Determinants of the Intention of Green Innovation Implementation in the Logistics Industry: The Case of Logistics Service Providers in Vietnam
The The study identifies the factors relating to technology, organization and environment aspects influencing the intention of green innovation implementation in the logistics industry – the study with the logistics serv...
Factors Influencing the Whistleblowing System in the Government of Jakarta Capital Special Region, Indonesia
This study aims to examine factors influencing the whistleblowing system in the governmental institution (i.e., attitude-behavior, norm values, and employee solidarity) which is represented by the government of Jakarta C...
The Influence of Product Quality, Promotion, Trust, Convenience and Price on Purchasing Decisions with Brand Image as an Intervening Variable
Today's advanced age has the potential to change people's lives. Throughout these modern times, several technical developments have taken place, among which are software and data innovations. E-commerce has become a part...
The Influence of Achievement Motivation, Affiliation Motivation and Power Motivation through Work Spirit on Employee Performance at Pt. Bpr Penebel
This research was conducted based on field phenomena which indicated that employee performance was not optimal, allegedly caused by weak achievement motivation, affiliation motivation, power motivation and work enthusias...