This study takes a fresh look at the direction of causality between financial development and economic growth in Kenya by examining the impact of inflation on the finance-growth nexus. The empirical results reveal that economic growth Granger-causes financial development in Kenya irrespective of whether the causality is estimated in a bivariate framework or in a trivariate setting. The study, therefore, concludes that the financial sector development in Kenya is largely dependent on the demand for, rather than the supply of, financial services. Other results show that economic growth Granger-causes inflation while inflation Grangercauses financial development in Kenya. The results apply irrespective of whether the causality is estimated in the short run or in the long run.

(2009). Finance-growth nexus and inflation dynamics in Kenya: an empirical investigation [journal article - articolo]. In SAVINGS AND DEVELOPMENT. Retrieved from http://hdl.handle.net/10446/27431

Finance-growth nexus and inflation dynamics in Kenya: an empirical investigation

2009-01-01

Abstract

This study takes a fresh look at the direction of causality between financial development and economic growth in Kenya by examining the impact of inflation on the finance-growth nexus. The empirical results reveal that economic growth Granger-causes financial development in Kenya irrespective of whether the causality is estimated in a bivariate framework or in a trivariate setting. The study, therefore, concludes that the financial sector development in Kenya is largely dependent on the demand for, rather than the supply of, financial services. Other results show that economic growth Granger-causes inflation while inflation Grangercauses financial development in Kenya. The results apply irrespective of whether the causality is estimated in the short run or in the long run.
articolo
2009
Cet étude jette un nouveau regard sur la causalité entre le développement financier et la croissance économique au Kenya grâce à une analyse de l’impact de l’inflation sur la connexion finance-croissance. Les résultats empiriques montrent que la croissance économique cause (selon la théorie de Granger) le développement financier au Kenya indépendamment du contexte bivariable ou trivariable où la causalité s’est produite. D’après cet étude, il en ressort que le secteur du développement financier au Kenya est strictement dépendant de la demande de, plutôt que de la fourniture de,services financiers. D’autres résultats révèlent que la croissance économique cause (au sens de Granger) l’inflation, alors que l’inflation cause (au sens de Granger) le développement financier en Kenya. Les résultats ne tiennent pas compte si la causalité est estimée à court terme ou à long terme.
Odhiambo, NICHOLAS M.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/27431
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