Browsing by Author "Ouma, Anthony"

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    Monetary Policy and Private Investment in Uganda.
    (Makerere University Business School, 2023-10-02) Ouma, Anthony
    This study investigates the effect of monetary policy on private sector investment in Uganda. Employing the Auto Regressive Distributive Lag (ARDL) approach and the bounds test for cointegration, the study regressed Gross Fixed Capital Formation against monetary policy variables; money supply, lending interest rate, inflation and GDP per capita as a control, over a 30 year period using annual data. The study established that all independent variables, apart from lending interest rate, negatively affected private investment in the short run. In the long run, all independent variables have a negative effect on private investment, apart from GDP per capita. The study recommended that although government can run an expansionary monetary policy in the short run, it should avoid prolonging it because in the long run it hurts private investment through increases in money supply, rising inflation and rising lending rates.