Macroeconomic Drivers of Economic Growth
Journal Title: Journal of Economics, Finance and Management Studies - Year 2022, Vol 5, Issue 02
Abstract
Kenya's GDP growth is hampered by high fiscal deficits, high interest rates, and volatile exchange rates. As a result, the economy has experienced sluggish cycles of low economic growth, prompting policymakers to revise their policies. Kenya's ability to address macroeconomic instability hinges on its ability to increase economic growth. Divergent perspectives on the relationship between selected macroeconomic variables and economic growth is revealed by additional evidence. The goal of this research was to see how certain macroeconomic drivers affected economic growth. The study was based on the theory of endogenous growth. The study, which was based on the philosophical paradigm of positivism, used an explanatory research design and secondary data from the Kenya Bureau of Statistics, which covered the years 1990 to 2020. In the empirical analysis, the study used the bound test to test for a long-run relationship and the Autoregressive Distributed Lag model (ARDL) to evaluate the relationship between the variables. The data was tested for stationarity using the Augmented Dickey Fuller method. The long run ARDL results showed that the coefficients of exchange rate 0.080 (p-value 0.033 < 0.05), lending interest rate -0.172 (p-value 0.011 < 0.05), and broad money supply 0.242 (p-value 0.001 < 0.05) all had a significant impact on economic growth. The results of this study will be useful in forming fiscal and monetary policy, as well as in informing the government about potential solutions to economic growth challenges. According to the study, CBK policymakers should pursue policies that ensure exchange rate stability, determine effective lending interest rates, and keep the fiscal deficit in line with Kenya's economic growth.
Authors and Affiliations
Erickson Matundura, Dr. Elvis Kiano, Dr. Alfred Serem
Keywords
Related Articles
- EP ID EP706921
- DOI 10.47191/jefms/v5-i2-19
- Views 80
- Downloads 0
Three Factors Earnings Management Simultaneously Impact the Financial Performance of Food and Beverage Companies Period 2017-2021 Recorded Bei
The objective of the study was to describe the impact of tax planning, management premiums, and information asymmetry on business performance in companies in the food and beverage subsector for the period 2017-2021 in ID...
Evaluation of the Firm Performance: Evidence from Food Firms Listed in the Hanoi Stock Exchange
The main objective of this study was to identify, evaluate, and to measure the attributes of the firm performance of Food Firms Listed in the Hanoi Stock Exchange (HNX). The study was based on professional interviews an...
Financial Management in the Tradition of Women Proposing Men
Generally in a marriage, the man proposes to the woman. On the contrary, the famous and typical proposal custom in Lamongan is that a woman proposes to a man. This research aims to determine the motivation and ways of ma...
External Borrowing, Government Expenditure and Road Construction in Nigeria
External borrowing is a significant source of government revenue, and the increase in the levels of foreign borrowing is taken as evidence of progress toward meeting economic and infrastructure goals. Despite the massive...
Analysis Overconfidence, Herding, and Anchoring in Investment Decisions Among ESOP at PT Bank Central Asia
This This study aims to determine the influence of behavioral finance or psychological bias on investment decisions made by Employee Stock Ownership holders of PT Bank Central Asia. Tbk focuses on variables such as overc...