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

  • Onesmus Mutunga Nzioka University of Nairobi
  • Erasmus Kaijage Professor, School of Business, University of Nairobi
  • Duncan Elly Ochieng Lecturer, School of Business, University of Nairobi

Abstract

This study aimed at determining the moderating effect of macro-economic 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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Published
2017-07-31
How to Cite
Nzioka, O. M., Kaijage, E., & Ochieng, D. E. (2017). Financial Integration, Macroeconomic Volatility And Economic Growth In The East African Community. European Scientific Journal, ESJ, 13(19), 317. https://doi.org/10.19044/esj.2017.v13n19p317