Theses and Dissertations
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Item Effects Of Macroeconomic Factors On Income Inequality In East Africa(KCA University, 2017) Ndungi, Griffins M.Stable macroeconomic environment enables achievement of the macro-economic objectives and targets. Therefore, governments should continually focus on stabilizing macroeconomic factors such as interest rates, inflation rates, trade openness and unemployment levels while implementing policies that spur fair distributive economic growth. Generally, inequality in the world with the East African region included has got the attention of development organisations, policy makers and governments as well as citizens. The objective of the study was to establish the impact of macroeconomic factors on income inequality levels in East Africa. The specific objectives of the study were to establish the influence of unemployment, interest rates, international trade openness and inflation on income inequality in East Africa. The study applied a descriptive research design. The study focused on Kenya, Uganda and Tanzania. Data that was utilized in the study was data for forty one years (1975-2015). Secondary data was used in this study. This data was sourced from World Trade Organization, World Bank, Kenya National Bureau of Statistics (KNBS), Uganda Bureau of Statistics, Tanzania National Bureau of Statistics and Institute of Economic Affairs (IEA). Vector Error Correction Model (VECM) was applied for analysis using stata statistical software. The results indicated that in Kenya, inflation had a negative and significant effect on income inequality (B = -7.31; p < 0.05). Interest rates on the other hand had a significant positive effect on income inequality (B = 2.8; p < 0.05). Unemployment (B = 4.13; p > 0.05) and international trade openness (B = 0.69; p > 0.05) had long term insignificant effect on income inequality. In Uganda, inflation (B = -.043; p < 0.05), unemployment (B = -4.13; p < 0.05) and international trade openness (B = -.498; p < 0.05) had negative and significant effects on income inequality. Interest rates on the other hand had a significant positive effect on income inequality (B = 0.29; p < 0.05). In Tanzania, inflation (B = 2.33; p < 0.05) and international trade openness (B = 1.16; p < 0.05) had significant positive effects on income inequality while unemployment (B = -13.86; p < 0.05) and interest rates (B = - 1.71; p < 0.05) had significant negative effect on income inequality. The following were the recommendations. First, the three east African governments should institute policies to reduce income inequality. Some of the policies that could be considered include reducing interest rates to enhance aggregate demand, developing the human capital to reduce long term structural unemployment and also lowering the minimum wage so as to deal with real wage unemployment. Secondly, the countries should moderately engage in trade openness by balancing exports and imports ensuring that the balance of trade deficit does not grow. Lastly, the monetary policy organs of the country should carefully analyse the inflation, interest rates and macroeconomic factors to ensure that the expansionary or contractionary policies they adopt lead to the desired outcomes of improving income distribution.Item Effect Of Selected Macroeconomic Variables On Trade Balance In Kenya(KCA University, 2019) Gedi, Yussuf A.The subject of Trade Balance has drawn much attention and focus in recent years. The balance of payments records transactions that flow in and out of the country. Research has shown that macroeconomic variables including exchange rate, inflation and interest rate highly influence trade Balance.The study aimed at determining the effect of selected macroeconomic factors on the trade balance in Kenya. The specific objectives were to find out the effects of interest rate, exchange rate as well as inflation on trade balance in Kenya. The study was conducted in Kenya involving macroeconomic data between 1985 -2015. Data collected was purely secondary. The study adopted interest rate parity theory, purchasing power parity theory as well as balance of payment theory in articulating the synthesized concept under the study. The research design was descriptive in nature. The findings of the study was presented using graphs, professional tables as well as charts which was analyzed through time series regression analysis method and was enhanced by use of Eviews 9. The study found that real exchange rate and interest rate positively affects the balance of trade while inflation has a negative effect on the balance of trade. The finding is thereby important to the central bank, the Kenyan government, citizens as well as the scholars and academicians.