No abstract

There has been a high and growing incidence of poverty in sub-

In line with the recent assertion that institutional quality matters in the way financial development influences economic growth in financial economics literature, this study examines the moderating role of institutional quality in the finance‐growth nexus in Kenya for the period 1986–2015. A fully modified ordinary least square (FMOLS) estimator is adopted to take care of endogeneity problem inherent in the relationship among the variables while error‐correction version of autoregressive distributed lag (ARDL) technique is adopted to take care of short‐ and long‐run effects. The research outputs reveal that in the short‐run institutions and finance complement and reinforce each other to enhance growth, while institutional framework in Kenya constitutes a drain that leaks out the growth benefits of financial development in the long run. It is also found that the country majorly operates below the threshold level of institutional quality required to maximize the growth benefits of financial development. This study, therefore, concludes that institutional framework guiding the operations of financial system in Kenya should be strengthened so as to block loopholes and lapses that leak out the growth benefits of finance.JEL CLASSIFICATIOND53; E02; N27; O43

This study examined the structural break relationship between external debt and economic gro wth fro m 1980 to 2009 with a view to examine the effect of external debt relief on economic growth in Nigeria. The effect o f huge external debt of less developed countries is believed to impede investment resources. This has resulted in debt restructuring of various kinds in Nigeria with some concessional loans, as well as the external debt relief in 2005. A decade after the debt relief critical sectors of the economy such as education, health, electricity, transport and exchange rate etc. suppose to show evidence or sources of such debt relief. So me studies found the effect of external debt relief to be doubtful especially on economic growth. Hence, a scientific study of the debt relief g ranted Nigeria by the Paris club in 2005 is here evaluated in respect of the effect on economic gro wth in the country. The study used quarterly time series of external debt, external debt service and real gross domestic product to determine the structural break effect of external debt on economic growth in the Nigeria as a result of the debt relief. The result of the chow test showed that the 2005 external debt relief caused a structural break in economic growth relationship with external debt in Nigeria. The study further showed that beside the reduction in aids, resources were freed for economic growth projects in health and education sectors. Conclusively, the external debt relief did make availab le resources for economic growth in Nigeria. Countries are therefore reco mmended toward discretional concessional borrowing and see external debt relief as a good option for poor unsustainable indebted countries as a way of making resources available for economic gro wth. The real sector should be the focal point where value is created rather than imped ing it with mis management and servicing debt.

This study investigates the effects of monetary and fiscal policies on the real output growth in a small open economy. It is a countryspecific, time series study that verifies the implication of increasing economic openness on the efficacy of monetary and fiscal policy. A modified GARCH model was used to estimate the anticipated and unanticipated shocks. Two measures of fiscal and monetary shocks were combined with openness and real oil price shocks in a VECM model to assess the effects of anticipated and unanticipated policy shocks on the output equations. The empirical results showed that anticipated and unanticipated fiscal and monetary shocks had no significant positive effects on real output. This suggests that the open macroeconomic version of the policy ineffectiveness proposition was valid for both monetary and fiscal policy shocks in Nigeria. This is in consonance with earlier works in this area. Furthermore, the degree of openness and oil price shocks had a negative implication on the efficacy of macroeconomic policy in Nigeria; also in agreement with the Dutch Disease Syndrome. Finally, the policy implication of this study therefore is that trade liberalization policy should be implemented cautiously. The Nigerian economy is weak to withstand the unwholesome consequences of full economic integration.