An Empirical analysis of the Effect of Money Supply and Economic Growth: Evidence From Sub-Saharan Africa
| dc.contributor.advisor | Atnafu GebremeskeI | |
| dc.contributor.author | Tizita Assefa | |
| dc.date.accessioned | 2026-11-05T06:48:38Z | |
| dc.date.available | 2026-11-05T06:48:38Z | |
| dc.date.issued | 2026-06-02 | |
| dc.description.abstract | This study empirically examines the effects of money supply on economic growth in 12 Sub Saharan African countries over the period 1970-2023 using second-generation panel econometric techniques. The fixed Effects model (preferred by the Hausman test) reveals that money supply increases GDP by 0.022%. However, investment is the dominant driver of growth with an elasticity of 0.59155, which is approximately 27 times larger than money supply. The Westerlund cointegration test confirms a long-run equilibrium relationship, with the Pooled Mean Group (PMG) long-run estimation revealing a money supply elasticity of 0.02345 and an error correction speed of 31.2% per year. The Granger Causality test shows unidirectional causality from M2 to GDP, supporting the supply-leading hypothesis. Strong cross-sectional dependence exists for all variables, requiring regional monetary coordination. Substantial income group heterogeneity exists, with money supply elasticities varying from 0.089 (uppermiddle) to0.011 (low-income). Investment promotion should be the top priority (27 times more powerful than money supply). A one-size-fits-all monetary policy is inappropriate for heterogeneous SSA | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/9285 | |
| dc.language.iso | en | |
| dc.publisher | Addis Ababa University | |
| dc.subject | Money supply | |
| dc.subject | Economic Growth | |
| dc.subject | Panel data | |
| dc.subject | Fixed Effects | |
| dc.subject | Heterogeneity | |
| dc.title | An Empirical analysis of the Effect of Money Supply and Economic Growth: Evidence From Sub-Saharan Africa | |
| dc.type | Thesis |