IDEAS home Printed from https://ideas.repec.org/h/ito/pchaps/213528.html
   My bibliography  Save this book chapter

Effects of Some Monetary Variables on Fixed Investment in Selected Sub-Saharan African Countries

In: Linear and Non-Linear Financial Econometrics -Theory and Practice

Author

Listed:
  • Thobeka Ncanywa
  • Ombeswa Ralarala

Abstract

Monetary variables are not only important for the attainment of stable inflation but also for exercising influences in various ways on the behavior of the real economy, including the level of investment activity. Investment is very crucial in improving a country's productivity and growth and increasing its competitiveness in the long run. The study aims to investigate how monetary variables such as lending rates, exchange rate, and money supply affect investment actions in some selected Sub-Saharan African countries in the period 1980-2018. Using the panel autoregressive distributive lag method in the long run, a negative and significant relationship between lending rates and investment was discovered. Also, investment is positively related to both money supply and exchange rate in the long run. It is recommended that when central banks take contractionary measures, they must always consider the resulting change in investment as it is an essential part of aggregate demand. In a sluggish economy, interest rates should not be raised to the point where investment is discouraged and assets are suppressed.

Suggested Citation

  • Thobeka Ncanywa & Ombeswa Ralarala, 2021. "Effects of Some Monetary Variables on Fixed Investment in Selected Sub-Saharan African Countries," Chapters, in: Mehmet Kenan Terzioglu & Gordana Djurovic & Martin M. Bojaj (ed.), Linear and Non-Linear Financial Econometrics -Theory and Practice, IntechOpen.
    • Handle: RePEc:ito:pchaps:213528
    DOI: 10.5772/intechopen.93656
    as

    Download full text from publisher

    File URL: https://www.intechopen.com/chapters/73332
    Download Restriction: no
    File URL: https://libkey.io/10.5772/intechopen.93656?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    lending rates; exchange rate; money supply; investment; sub-Saharan Africa; panel autoregressive distributive lag;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ito:pchaps:213528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Slobodan Momcilovic (email available below). General contact details of provider: http://www.intechopen.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.