Financial Integration, Macroeconomic Volatility And Economic Growth In The East African Community

Citation:
Nzioka OM, Kaijage E, Ochieng DE. "Financial Integration, Macroeconomic Volatility And Economic Growth In The East African Community." European Scientific Journal. 2017;13(19):317-331.

Abstract:

This study aimed at determining the moderating effect of macroeconomic
volatility on the relationship between financial integration and
economic growth in the EAC.
The study adopted a positivistic research philosophy and casual research
design.. Generalized-two stage least squares instrumental variable regression
model (G2SLSIV) was then conducted to test the hypothesis. The findings of
the study showed that, macro-economic volatility does not have a significant
moderating effect on the relationship between financial integration and
economic growth. Therefore, the study recommends that, the governments of
respective member states work on a monetary policy that aims to attain a
single digit level of inflation rate (low inflation targeting), in the spirit of
macro-economic convergence. The study culminates with acknowledging the
limitations encountered and provides suggestions for further research.

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