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Macro Models of the Kenyan Economy: A Review
Abstract
Abstract
... The research determined that the availability of money and EXCH had a significantly negative correlation between the variables of interest in Kenya and Singapore. Karingi and Ndung'u (2000) examined the correlations between broad money, changes in the real effective EXCH, domestic rate of inflations, and the government's proportion of domestic credit. The analysis was based on yearly data from a time series extended from 1970 to 1995. ...
The present paper aims to examine the relationship between the exchange rate (EXCH) and some macroeconomic variables (inflation rate, economic growth, interest rate and money supply) in the State of Serbia during 2002-2022 using the ARDL distributed lag model. By estimating the model in both the short and long run, it was found that there is an equilibrium correlation in the long run and a mechanism to correct the error given the error correction coefficient (negative and significant). According to the short and long-term estimates, all variables have a significantly negative correlation with the dependent variable (EXCH) except economic growth, which has a positive correlation.
The overall goal of the Government of Kenya is to promote and improve the
health status of all Kenyans by making health services more effective, accessible,
and affordable. To address problems in the health sector, and to make healthcare
accessible and affordable, the government, in the early year after independence,
instituted and implemented various healthcare reforms, among them setting
up of health insurance through the National Hospital Insurance Fund (NHIF).
However, the focus of NHIF has been mainly on formal sector employees. This
has left out those in the informal sector, those in agriculture, and pastoralists.
The government plans to transform the current NHIF to a National Social
Health Insurance Fund (NSHIF) as a way of ensuring equity and access to
health services by the poor and those in the informal sector, who have been left
out for the forty years that the NHIF has been in existence. In view of the
proposed transformation, this paper aims to lead policy makers and programme
planners through the process of evaluating the usefulness and feasibility of a
social health insurance system. The paper offers insight into the process of a
successful implementation of such as scheme by addressing the foreseen obstacles
and issues of desirability and feasibility in assessing the appropriateness of social
health insurance. It also addresses the likely impact on the economy, the health
sector and the various stakeholders, after introduction of the insurance scheme.
The paper reviews the experiences of other countries and draws lessons from
those experiences. The paper finds that most of the conditions for setting up a
social health insurance in Kenya are not yet in place and a lot needs to be done
to meet these conditions. In addition, there are likely to be both positive and
negative impacts on various stakeholders. The paper recommends that the
decision to introduce universal health insurance be premised on a careful and
thorough assessment of all the issues being raised, and implementation based
on clearly outlined stages.
After unprecedented decline in Kenya’s cotton-textile-apparel industry since the early 1990s, substantial interest in its revival has emerged. This interest has largely been stimulated by the market opportunity presented by the United States’ African Growth and Opportunity Act (AGOA) of 2000 and the potential of the industry in poverty alleviation. Within only two years of qualifying for AGOA, Kenya’s exports of clothing, and investment in the textile sector, have experienced remarkable growth. This study explores the prospects of this growth continuing after 30 September 2004, when Kenya will be required to source raw materials either locally, from other AGOA eligible sub-Saharan African (SSA) countries, or from the US. Using secondary and primary production, trade and other types of data relating to the entire cotton-textile-apparel chain, this study looks at the issues involved and examines the prospects of each of the various options available to the country. The study shows that none of the three options is feasible to Kenyan apparel producers as things stand now. High quality fabric and yarn are available from the US but sourcing them to make apparels will at least double the unit cost of apparels and make them uncompetitive. Kenya has a cotton-textile-apparel supply chain in place but only the garments part of it can be said to be thriving and fairly competitive. Many apparel firms are already exporting to the US, which is impressive considering the stringent requirements of that market. All the other parts of the chain, however, are very disorganized, weak and lack adequate capacity, largely due to infrastructure, market, and policy constraints. Cotton production is insufficient and the capacity to produce high quality and competitive fabrics is lacking. The option of sourcing fabric and/or yarn from other AGOA-eligible SSA countries is limited by the fact that the region does not meet the fabric requirements of its apparel sub-sector due to various supply constraints. Moreover, the fabric produced locally and regionally falls short of the variety and quality demanded by the US market. For Kenya and the rest of SSA, the solution lies in sourcing fabric from the local cotton-textile industries, or the region through collaborative and strategic regional cotton-textile supply chains. For quality fabrics to be supplied locally and competitively, substantial capacity building in the lower parts of the cotton-textile chain is required. Critical inputs into this capacity building include establishment of an apex stakeholder institution to coordinate the industry and provide necessary regulation, cost-reducing interventions at all points in the chain, incentives to stimulate investment (at the ginning, spinning and fabric finishing parts of the supply chain), improved macroeconomic management, identification of niche markets, and accumulation of the necessary capital and skills.
This book confronts the practical problems of modelling aggregate time series data, in a systematic and intergrated framework. The main problem in econometric modelling of time series is discovering sustainable and interpretable relationships between observed economic variables. The primary aim of this book is to develop an operational econometric approach which allows constructive modelling. Professor Hendry deals with methodological issues (model discovery, data mining, and progressive research strategies); with major tools for modelling (recursive methods, encompassing, super exogeneity, invariance tests); and with practical problems (collinearity, heteroscedasticity, and measurement errors). He also includes an extensive study of US money demand. The book is self-contained, with the technical background covered in appendices. It is thus suitable for first year graduate students, and includes solved examples and exercises to facilitate its use in teaching. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/0198283164/toc.html
This paper describes and examines simple versions of the analytical approaches employed by the International Monetary Fund and the World Bank in designing adjustment programs that support their lending activities. In the case of the Bank this means essentially a variant of the two-gap growth model, and for the Fund a model derived from the monetary approach to the balance of payments. An attempt is also made to merge the Fund and Bank approaches within a consistent framework to demonstrate their complementarity.
This paper utilizes an error correction model to estimate demand elasticities for aggregate imports and components in Kenya over 1964-91. The results show the short-run relative price and real income aggregate import demand elasticities to be non-significant or weakly significant. On the other hand, aggregate imports were strongly responsive to lagged forex reserves and forex earnings. The non-significant or weakly significant relative price and real income elasticities suggest that devaluation and stabilization policies pursued in the past did not effectively assist trade liberalization efforts, at least at the rate they were implemented. More generally, they suggest that policies that directly increase export earnings and access to external capital inflows are likely to have a larger impact on import volumes than those that concentrate exclusively on aggregate demand and exchange rate management. Copyright 1993 by Oxford University Press.