Economic Growth-Financial Deepening- Poverty Nexus in Rwanda
DOI:
https://doi.org/10.17613/nwzf-h630Keywords:
Economic growth, financial deepening, income distribution, financial efficiency, poverty, RwandaAbstract
The study examined the relationship between economic growth, financial deepening, income distribution, financial efficiency and poverty level in Rwanda an East African Community country. The specific objectives of the study included establishing the direct effect of economic growth on poverty level in Rwanda; determining the indirect effect of financial deepening, income distribution, financial efficiency on poverty level in Rwanda. The study adopted descriptive research designs. Annual data for 30 years beginning 1989 to 2018 was gathered for the study purpose. Secondary data, which consisted of annual data, was utilized in the study. The study employed normality, heteroscedasticity, multicollinearity, serial correlation, optimal lag test, unit root diagnostic tests, cointegration test. The data was analyzed using inferential statistics with the help of excel and STATA version 14. Inferential statistics analysis was performed based on Autoregressive Distributed lags (ARDL) model to ascertain the causal effect link between various variables relating to economic growth, financial deepening, income distribution, financial efficiency and poverty levels in Rwanda. The study results revealed that economic growth had a significant direct effect on poverty level in Rwanda. The study also revealed that financial deepening and income distribution had a significant indirect effect on poverty in Rwanda. The study recommends that the government should put down concrete plans aimed at improving economic growth rates. In addition, the governments of Rwanda countries to work towards encourage financial deepening within their respective countries
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