Browsing by Author "Subila, Suzan"
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- ItemEffects of monetary policy on economic growth in Uganda (1991-2014):(Kampala International University, College of Economics and Management., 2018-08) Subila, SuzanThis study thrusts on the effects of monetary policy on economic growth in Uganda specifically to establish the effects of interest rate and money supply on Economic growth. It was based on time series data for the period of 1991-2014 obtained from the International Financial Statistics (IFS) which was employed for the analysis. Uni-variate analysis, Correlation matrix for the variables, Augmented Dickey Fuller test for stationary, Normality tests and finally the model estimation. 7’ The findings revealed that money supply has a positive significance on GDP. However, interest rate has a negative effect statistically insignificant at 5% level of significance. That is to say as Money increases also GDP increases, however, increase in interest rate reduces GDP. This is because investments rely on the rate of interest, High interest rate makes borrowing expensive to the investor. Thus reduced investments leads to reduced GDP. The government should explore rational mechanisms of stimulating increased demand through money supply since it has emerged as a key element that promotes economic growth. Secondly the government and the concerned bodies should be in position to regulate the amount of interest rates charged to the borrowers so as not to scare borrowers from borrowing a~ it constrains the rate of growth of the economy