Determinants of the real gross domestic product growth rate in Kenya, 1973-97
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Date
2014-03-24
Authors
Maingi, James N.
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Abstract
The Kenya Government has pursued stabilization and structural adjustment policies
for more than ten years in an attempt to restore and sustain the high growth rates
experienced in the 1960s and early 1970s. Despite these measures, real GDP in Kenya
has continued to be characterized by positive and negative rates of change of real GDP
growth rates. The cyclical fluctuations have been more marked, especially after 1973.
The objectives of the study were to identify the factors that determine fluctuations
in real gross domestic product (GDP) growth rate in Kenya, measure the relative effect of
the factors, and to give policy recommendations. Time-series data were collected from
government and world bank publications for the period 1973 to 1997. Data collected were
integrated to make it stationary. Ordinary least squares (OLS) method of estimation using
time-series programme (TSP) was applied on stationary data. Both linear and log-linear
models were run and on the basis of results linear model was adopted. From the linear
regression results, growth of capital stock, export growth, financial development, external
debt, exchange rate, and real interest rate were found to be significant determinants of
real gross domestic product. On the basis of these findings, policy recommendations were
then drawn on these variables so as to accelerate the pace of GDP growth rate in Kenya.
Description
Department of Economic Theory, 56p. The HB 141.5.M3 1999
Keywords
National income--Kenya--Accounting