The Relationship between Stock Market Capitalization and Money Demand in Tanzania: Evidence from ARDL Approach and Granger Causality Test

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dc.creatorKinyondo, Abel
dc.creatorByaro, Mwoya
dc.date2018-04-02T14:24:39Z
dc.date2018-04-02T14:24:39Z
dc.date2015
dc.date.accessioned2018-04-11T08:38:46Z
dc.date.available2018-04-11T08:38:46Z
dc.descriptionThis paper investigates the relationship between stock market capitalization (MC) and money demand in Tanzania between 2000 and 2010. Findings show the presence of a long-run relationship between MC, extended broad money (M3) and interest rate when real GDP serves as dependent variable. Furthermore, saving deposit rate/real interest rate, M3 and MC variables were found to have a positive and significant influence on real GDP. However, the study captures the absence of long-run relationship between MC and money demand when M3 act as dependent variable. Also the study found a unidirectional relationship between MC and real GDP with causality running from MC to real GDP. This suggests that MC plays a vital role in promoting economic growth in Tanzania. Moreover bidirectional causality between M3 and MC was found. This implies that MC has an impact on M3 in the short run. In turn, unidirectional causality running from broad money (M2) to MC was found meaning M2 has an impact on MC growth. Given the obvious impact of MC in economic growth in Tanzania, the paper concludes by strongly recommending for policies geared towards promoting MC growth including controlled expansionary monetary policies.
dc.identifierKinyondo, A and Mwoya, B. (2015). “The Relationship between Stock Market Capitalization and Money Demand in Tanzania: Evidence from ARDL Approach and Granger Causality Test”. International Journal of World History and Economics, 4(7), pp. 1-7
dc.identifier2249-8079
dc.identifierhttp://hdl.handle.net/20.500.11810/4654
dc.identifier.urihttp://hdl.handle.net/20.500.11810/4654
dc.languageen
dc.publisherInternational Journal of World History and Economics
dc.relation4;7
dc.titleThe Relationship between Stock Market Capitalization and Money Demand in Tanzania: Evidence from ARDL Approach and Granger Causality Test
dc.typeJournal Article, Peer Reviewed

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