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The Effect of Monetary Policy on Economic Growth in Ethiopia
Issue:
Volume 7, Issue 6, December 2021
Pages:
133-143
Received:
17 November 2021
Accepted:
8 December 2021
Published:
24 December 2021
Abstract: There is an ambiguous relationship between monetary policy and economic growth both in theoretically and empirically. Hence, this study was examined the link among monetary policy and economic growth in Ethiopia by using time series data from 1980-2019. Zivot and Andrews (ZA hereafter) and Clemente (CMR hereafter) unit root test revealed that real interest rate was stationary at level. while log of real gross domestic product, log of gross capital formation, log of money supply, exchange rate, reserve requirement and consumer price index were stationary after first differencing in both tests. The results of ARDL bounds test for co-integration showed the present of long run relationship among the series during the study period. Long run estimation indicated that the existence of positive statistical significant effect of money supply, real interest rate, reserve requirement and gross capital formation on economic growth in Ethiopia during the study period. While, exchange rate has negative effect on economic growth. The study also revealed that, inflation has no significant effect on economic growth in the long run. The short run estimation showed that except inflation index, other variables (money supply, gross capital formation, reserve requirement and real interest rate) has positive significant effect on economic growth in Ethiopia in the study period. However, exchange rate has no significant effect in the short run. The Error correction model (ECM) test showed that about 29% of short run disequilibrium was be adjusted every year. The test of causality showed that a causation between real gross domestic product with inflation, exchange rate and money supply at 5% level of significant and a causality with gross capital formation at 10% level of significant. In conclusion, there were positive relationship most of the monetary policy instrument variables with economic growth except inflation and exchange rate for this study. As a recommendation, national banks of Ethiopia should be committed to the mission of price stability.
Abstract: There is an ambiguous relationship between monetary policy and economic growth both in theoretically and empirically. Hence, this study was examined the link among monetary policy and economic growth in Ethiopia by using time series data from 1980-2019. Zivot and Andrews (ZA hereafter) and Clemente (CMR hereafter) unit root test revealed that real ...
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Determinants of Life Insurance Demand: Evidence from Ethiopia
Tilahun Shewangezaw Kura,
Habtamu Alebachew Legass
Issue:
Volume 7, Issue 6, December 2021
Pages:
144-154
Received:
19 November 2021
Accepted:
14 December 2021
Published:
24 December 2021
Abstract: Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the life insurance demand by investigating the determinants of the demand for life insurance in Ethiopia. Specifically, this study aims to investigate the effect of savings, growth in per capita income, total population growth, urbanization, political instability, and health expenditure to GDP on demand for life insurance in Ethiopia in both the short run and long run by using a secondary source of data collected between 1995 and 2019. The study employed both descriptive statistics and the Autoregressive distributive lag model (ARDL) to compute the characteristics of institutional, social security, macro-economic and demographic factors and to identify their effect on demand for life insurance respectively. The findings of the study revealed that savings, growth in per capita income, total population growth, urbanization, and political instability have a positive and significant effect on demand for life insurance in Ethiopia. Whereas, health expenditure to GDP has been found insignificant in the long run. In addition, all variables apart from total population growth and political instability which has a positive effect do not affect life insurance demand in the short run.
Abstract: Life insurance is a financial product that aims to protect dependents against the risks of premature death or disability of the insured party. Various pieces of evidence and literature show that the level of life insurance business and its demand in Ethiopia is very low. As a result, this thesis paper focused on potential ways of increasing the lif...
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Impact of Financial Factors on Financial Performance Evidence from Insurance Companies in Ethiopia
Habtamu Alebachew Legass,
Misgan Mulatie,
Anwar Adem Shikur,
Tilahun Shewangizaw Kura
Issue:
Volume 7, Issue 6, December 2021
Pages:
155-163
Received:
25 November 2021
Accepted:
14 December 2021
Published:
24 December 2021
Abstract: The main purpose of the study was to assess the influence of financial factors on the financial performance of 11 insurance businesses in Ethiopia that were deliberately selected. The researcher employed an explanatory research design with a quantitative research approach using panel data in this study. Secondary data was acquired from Ethiopia's national bank for this investigation. In terms of sampling, the researcher employed a purposive sampling strategy based on the availability of data, the year of establishment, and the insurances' operational life. Finally, using the EView10 software suite, the data was evaluated. As a result, the regression was done using a random effect regression model. The results of random effect regression analysis revealed that liquidity ratio, premium growth, and gross domestic product have positive and statistically significant effects on Ethiopian insurance companies' financial performance, while other variables such as leverage, underwriting risk, and inflation rate have negative and statistically significant effects. Finally, the researcher advised Ethiopian insurance company executives to prepare for macroeconomic changes by developing financial plans, developing new product lines, and conducting extensive advertising to increase their market share, and to place a greater emphasis on factors that increase premium and liquidity ratios, as well as factors that reduce leverage and underwriting risk, in order to improve their operational and financial performance.
Abstract: The main purpose of the study was to assess the influence of financial factors on the financial performance of 11 insurance businesses in Ethiopia that were deliberately selected. The researcher employed an explanatory research design with a quantitative research approach using panel data in this study. Secondary data was acquired from Ethiopia's n...
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An Economic Analysis of the Factors Influencing Avocado Production, Profitability and Sustainability in Rwanda: A Case Study of Burera, Gicumbi, and Musanze Districts
Ntabakirabose Gaspard,
Tuyisenge Jean Claude,
Musoni Protais,
Ndaruhutse Felicien,
Majuga Jean Claude Noel,
Izamuhaye Jean Claude,
Hakizimana Fidèle,
Joshua Otieno Ogweno
Issue:
Volume 7, Issue 6, December 2021
Pages:
164-173
Received:
27 June 2021
Accepted:
9 July 2021
Published:
29 December 2021
Abstract: Agriculture plays a fundamentally important role in the economic growth and development prospects of a vast majority of developing countries including Rwanda where this sector is a main source of livelihood, providing direct employment. The aim of this study was to analyze the factors influencing avocado production, profitability and sustainability in Rwanda. A case study of Burera, Gicumbi, and Musanze Districts. A multistage sampling technique was employed in this study. Data were collected using a structured questionnaire where a sample size of 108 farmers was used. A Cobb Douglas production function and gross margin analysis were used to estimate the profitability of avocado fruits production for smallholder farmers sampled. Hass is the most cultivated avocado tree followed by fuerte, Ettinger, and traditional respectively. The profitability analysis of avocado farming in three districts indicated that fuerte generated more than other varieties followed by Hass and lastly traditional avocado for the tress aged between 3-10 years in study area. While the Net Farm Returns for avocado trees aged 11 years and above showed that Ettinger generated more than other varieties followed by fuerte and lastly Hass avocado for the tress aged between 11 years and above. This indicates that farmer should gain 26108 Rwf from 1 fuerte avocado tree per season and 22838 Rwf for the Hass tree aged between 3-10years. However, farmer should gain 34368Rwf from one fuerte avocado tree per season and 42313Rwf from ettinger aged 11years and above. Comparing the area occupied by one avocado tree and other crops like beans, maize, wheat, Irish potato and others, for example one fuerte and ettinger avocado tree should generate more than 1.2 and 1.7 times for maize respectively. Moreover, they should generate 2.5 and 3 times than beans crops in study area. With these results, it economically easy to say that avocado fruit is more profitable than all other crops grown in study area. The results indicated that gender of respondents, avocado yield, farm-gate, and price, access to extension services, education level, and land size had a positive effect on profit margin. With this result, avocado fruits trees should be promoted in area as they have a successful business.
Abstract: Agriculture plays a fundamentally important role in the economic growth and development prospects of a vast majority of developing countries including Rwanda where this sector is a main source of livelihood, providing direct employment. The aim of this study was to analyze the factors influencing avocado production, profitability and sustainability...
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