Issue

Vol. 13 No. 2 (2024)

Assessment of Macroeconomic Effects of Financial Liberalization in Tanzania: An Ardl Approach

https://doi.org/10.56279/13/2/0
Cornel Joseph
a:1:{s:5:"en_US";s:67:"University of Dar es Salaam, Mkwawa University College of Education";}
Ally A.L. Kilindo
St. Augustine University of Tanzania

Corresponding Author(s) : Cornel Joseph

cornell.mlacha@udsm.ac.tz

Journal of Humanities & Social Science (JHSS), Vol. 13 No. 2 (2024)

Abstract

Among the policies of economic reforms implemented in Tanzania has been the liberalization of the financial sector, which has been  ongoing since the beginning of the 1990s.  The financial liberalization hypothesis,  considers that liberalization in economically suppressed developing countries  contribute to increased savings, particularly financial savings, more credit supply, and better investment opportunities that  stimulate economic growth. Informed by the hypothesis, this study investigates the influence of financial liberalization on selected macroeconomic variables, which are savings, investment and economic growth. The ARDL method is employed with bound testing procedures, analyzing annual time-series data from 1990 to 2022. The results show that there is some support for a positive relationship between financial liberalization and savings, investment and economic growth during the study period. The policy implications emphasize the need to broaden financial liberalization beyond interest rate liberalization, including the attraction of capital inflows to boost savings, investment and economic growth.

Keywords

Financial Liberalization, ARDL, Economic Growth, Savings, Investment
Assessment of Macroeconomic Effects of Financial Liberalization in Tanzania: An Ardl Approach. (2024). Journal of Humanities & Social Science (JHSS), 13(2). https://doi.org/10.56279/13/2/0
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Assessment of Macroeconomic Effects of Financial Liberalization in Tanzania: An Ardl Approach. (2024). Journal of Humanities & Social Science (JHSS), 13(2). https://doi.org/10.56279/13/2/0
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