School of Business and Economics
Browse by
Recent Submissions
-
Kithandi, Charles Katua (International Journal of Scientific and Research Publications, October 30, 2022)[more][less]
Abstract: Corporate governance is the backbone of transparency, accountability, integrity and security of shareholders’ interest in an organization. An organization with poor corporate governance structure is likely to fail to achieve its objectives as well as have exposure to financial losses. The purpose of this study is to examine the effect of corporate governance on the financial performance of Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, Kenya A purposive sampling method integrating qualitative and quantitative design methods was employed in this study. The target and sample population were all the 42 Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, Kenya while a sample of 30 deposit-taking SACCOS was used for this study. For the 30 deposit-taking SACCOS, the company secretaries and other two executive top management members were each subjected to the study through the administration of questionnaires, hence three respondents per deposit-taking SACCOS. The published annual reports of the of 30 deposit-taking SACCOS were used to collect secondary data. SPSS research analysis tool was used emphasizing on the Multiple Regression Analysis and the Spearman Correlation Coefficient among others to assess the magnitude and relationship and thus come up with a finding of the relationship of the independent and dependent variables. The research found that corporate governance practices greatly affect Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, KenyaCorporate governance is the backbone of transparency, accountability, integrity and security of shareholders’ interest in an organization. An organization with poor corporate governance structure is likely to fail to achieve its objectives as well as have exposure to financial losses. The purpose of this study is to examine the effect of corporate governance on the financial performance of Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, Kenya A purposive sampling method integrating qualitative and quantitative design methods was employed in this study. The target and sample population were all the 42 Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, Kenya while a sample of 30 deposit-taking SACCOS was used for this study. For the 30 deposit-taking SACCOS, the company secretaries and other two executive top management members were each subjected to the study through the administration of questionnaires, hence three respondents per deposit-taking SACCOS. The published annual reports of the of 30 deposit-taking SACCOS were used to collect secondary data. SPSS research analysis tool was used emphasizing on the Multiple Regression Analysis and the Spearman Correlation Coefficient among others to assess the magnitude and relationship and thus come up with a finding of the relationship of the independent and dependent variables. The research found that corporate governance practices greatly affect Deposit-taking Savings and Credit Co-operative Societies in Nairobi City County, Kenya Description: Journal ArticleJournal Article URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3974 Files in this item: 1
-
Ekambi, J (International Journal of Recent Research in Commerce Economics and Management (IJRRCEM), September 14, 2022)[more][less]
Abstract: With an approximate population of over 600 million people (World Bank Group), Africa remains demographically, one of the most attractive users of social media. Essoungou, (2010) suggests that, using social media platforms, to send and read e-mails, read news, and post research queries have become less important activities for Africans, indicating that everyone is on social media. However, very little is known about how social media is used for management functions, by the managers and other organization leaders. This is partly because of the taken-forgranted assumptions that social media cover communications field and very little in other disciplines, a long side the fact that age bracket for mangers is skewed to older ages. This is made worse by the vastness of the continent and the poverty aspect of the sub-Saharan Africa. The various social media studies from the marketing field, argues that the pattern of economic-political changes taking place in sub-Saharan Africa indicates that the region is not only opening but also quickly becoming the next economic power. Social media creates value in management functions and is leverage for competitive advantage in management functions and cost-benefit analysis for investing in social media management services creates efficiency and effectiveness for greater performance. The study will use mixed method research design through mining secondary data from World Bank dataset on social media activities, taking four countries to represent the sub-Saharan Africa: Kenya, DRC Congo, South Africa, and Nigeria. Content analysis is used to structure the review and analysis of the existing dataset. The paper looks up to challenging management to buy in social media to a level where social media will have an anchor in management to move business to a greater level. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3972 Files in this item: 1
Simplicity and Profundity-14092022.pdf (581.1Kb) -
Kithandi, Charles Katua (The International Journal of Business & Management, June , 2022)[more][less]
Abstract: This study has been done to address the research gaps in the effect of monetary policy of commercial bank’s financial performance. The key objectives of the study were to establish the following; the effect of changes in central bank rate on financial performance of commercial banks in Kenya, the effect of reserve ratio requirement on financial performance of commercial banks in Kenya and, the effect of repo rate on financial performance of commercial banks in Kenya. The study was carried out covering a five-year time frame period from 2016 to 2020. The independent variables of the study involved: cash reserve ratio, Central bank rate, and the repo rate. Return on equity was used as the dependent variable. The study used descriptive longitudinal research design. The total population consisted of all the commercial banks, which is forty-two in number, licensed to operate in Kenya by the Central Bank of Kenya. The study employed various research tests; Durbin-Watson, quantile-quantile plot and normality test were applied in research finding analysis. The study found out that a negative relationship exists between both Central Bank rate and cash reserve ratio requirement and return on equity (financial performance) of commercial banks in Kenya. The research findings also showed that a positive relationship exists between repo rate and the return on equity (financial performance) of commercial banks in Kenya. In Conclusion, the study concluded that monetary policy affects profitability and financial performance of commercial banks in Kenya. The study recommends that, for central bank to stimulate economic growth, central Bank rate needed to be monitored and maintained low. Description: Journal Article URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3963 Files in this item: 1
-
Muthoka-Kagwaini, Dorothy (The Conversation, December , 2021)[more][less]
Abstract: Kenya’s central bank has been mulling the official use of a digital currency. More than 60 central banks have already entered the digital currency race since 2014. No details have been released in Kenya, but the central bank governor, Patrick Njoroge, commented that the bank was working with other global regulators and financial institutions to explore the use ofdigital currencies. The shift towards digital currencies has been used by some central banks to formulate and implementregulations to manage the use of cryptocurrencies. For example, Nigeria has launched its officialdigital currency, the eNaira . The World Economic Forum estimates that a third of Nigerians use or own cryptocurrencies. Kenya isone of the top three markets for Bitcoin , one of the more popular cryptocurrencies. Description: https://theconversation.com/kenya-needs-to-grasp-the-cryptocurrency-nettle-how-a-digital-currency-could-help-172092 URI: https://theconversation.com/kenya-needs-to-grasp-the-cryptocurrency-nettle-how-a-digital-currency-could-help-172092 Files in this item: 1
-
Onono, Perez Ayieko (Sustainable Agriculture Research, 2018)[more][less]
Abstract: Expansion of sorghum production in the arid and semi-arid areas in Kenya has been singled out as a potential for addressing food security challenges due to climate shocks affecting maize production and reduced availability of arable land in the medium and high potential areas. Towards achieving this government has used guaranteed minimum output prices, input subsidies and public investments to promote agricultural developments as some of the instruments of policy to provide incentives to farmers. Literature is deficient of studies on production behaviour of sorghum in the country with respect to market prices and public investments. This study provides empirical evidence on the response of sorghum production to output and input prices as well as to public investments. The study used data spanning the period 1978 to 2014 to fit an autoregressive distributed lag (ARDL) specification of the output response equation using the EViews statistical software. The findings show that sorghum production in Kenya does not respond to increases in its output price and is not adversely affected by input prices. Increased development spending in agriculture lead to increased sorghum production and also increase use of fertilizers and certified seeds. The findings suggest that policy interventions based on output prices and input prices alone would not yield the desired increased expansion in sorghum production. The government should increase budgetary allocations to agricultural development. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3664 Files in this item: 1
-
Onchomba, Molson Samwel; Njeru, Agnes; Memba, Florence (International Journal of Economics, Commerce & Management, 2018)[more][less]
Abstract: The main purpose of the study was to determine the influence of real estate loans on financial performance of commercial banks in Kenya and a corresponding hypothesis was formulated and tested. A census of 42 fully operational commercial banks in Kenya was done for a period of ten years from 2006-2015 because of increased loan portfolio, using across-sectional survey design. A questionnaire was used to collect primary data from one key person in the finance/credit department of each bank. Secondary data was collected from audited financial statements and other relevant financial sources using data analysis sheet. Both descriptive and inferential statistics were used. Statistical package for social sciences (SPSS) and STATA version 14 were used to analyze data. Research findings established that real estate loans influence the financial performance of commercial banks. The study findings are supported by the Utilization of modern portfolio theory. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3661 Files in this item: 1
-
Onchomba, Molson Samwel; Njeru, Agnes; Memba, Florence (International Journal of Economics, Commerce & Management,, 2018)[more][less]
Abstract: The main purpose of the study was to determine the influence of personal loans on financial performance of commercial banks in Kenya and a corresponding hypothesis was formulated and tested. A census of 42 fully operational commercial banks in Kenya was done for a period of ten years from 2006-2015 due to increased loan portfolio, using across-sectional survey design. A questionnaire was used on primary data that involved collecting data from one key person in the finance/credit department of each bank. Secondary data was collected from audited financial statements and other relevant financial sources using data analysis sheet. Both descriptive and inferential statistics were used. Statistical package for social sciences (SPSS) and STATA version 14 were used to analyze data. Research findings established that personal loans influence the financial performance of commercial banks. The study findings are supported by the Utilization of loan pricing theory and Asymmetric information theory. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3660 Files in this item: 1
-
Nyenze, Tracy; Kyongo, Joanes Kaleli (The International Journal Of Business & Management, 2017)[more][less]
Abstract: The purpose of the study was to establish the effect of leadership traits on firm performance in Kenya Wildlife Service (KWS) and a corresponding hypothesis was formulated and tested. The study targeted a sample of 98 employees at KWS Headquarters in Nairobi, and 79 of them responded. The study employed a descriptive research design and data was collected using structured questionnaires and analyzed using descriptive and inferential statistics by the help of SPSS version 21. The findings of the research established that leadership traits positively and significantly affects firm performance in Kenya Wildlife Service. The study was anchored on the Contingency theory, Organization system theory and Leadership traits theory. The study recommends further investigation of the study variables in other State Corporations locally and abroad. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3659 Files in this item: 1
-
Muriithi, Samuel Muiruri; Omollo, Judith; Wachira, Muturi (International Journal of Economics, Commerce and Management, United Kingdom, 2016)[more][less]
Abstract: The service industry worldwide has seen tremendous growth and is one of the fastest growing sectors both in the developed and developing economies. The growth is attributed to growing demand of clean atmosphere both at the workplace and domestic. Similarly, the demand for good health, safe and cleaner environment has made service businesses to start both in small and large magnitude. To successfully attain competitive advantage and boost growth, cleaning service businesses require the right strategies to be put in place. This paper examined strategies used by the cleaning industry in Kenya by focusing on a leading business in the country. The study targeted 112 managers from the target business and used a census sampling method. A questionnaire was used to collect primary data while a documentary analysis was done to collect secondary data. A pre-testing of the questionnaire was also conducted in order to validate the research instrument content. The findings from the study found that certain competitive strategies, namely professional and efficient service delivery, specialised quality services, cost effectiveness and niching were used to gain competitive advantage while product development, different marketing approaches, innovation and customer relationship managers where used to boost company’s growth. The use of these strategies ensured increased profit margin, customer satisfaction, brand position and sustainable growth. It is hoped that this study contributes significantly to the Kenyan cleaning industry both to new entrants and existing companies in terms of strategies to employ in order to excel in the industry. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3658 Files in this item: 1
-
Muriithi, Samuel Muiruri; Louw, Lynette (Palgrave MacMillan, 2017)[more][less]
Abstract: The banking industry is a major driver of economic development for world economies. By offering different types of services, such as facilitating money transfers between countries and ensuring that savers and borrowers are brought together in well-organised structures, the industry determines countries’ economic development and long-term sustainability. Although critical to world economic stability, the last six decades have seen the industry experience severe financial challenges which have negatively affected economic performance of most countries. The main causes of financial crises have been non-performing loans, political interference, uncertain global financial trends and poor leadership. The Kenyan banking industry is considered the most mature, fastest-growing and largest in East Africa, thereby making it the regional financial leader. The industry has, however, been a victim of both global and domestic financial challenges. Between 1980 and 2000, the country’s financial industry was characterised by major financial upheavals that led to the collapse of many banks, while others were in and out of receivership. The crises were attributed to non-performing loans, weak internal control mechanisms, poor governance and poor leadership. Since the year 2000, the government has instituted tough measures to revive the industry, which have resulted in stability. As such, the industry has experienced positive and encouraging growth, contributing towards making the sector the financial hub of the East Africa region. Despite recent gains, however, the industry still faces challenges of corruption, inability to reach the majority of the rural population, fragmentation and ineffective leadership. This chapter explores the importance of enhancing and strengthening the banking internal control mechanisms and developing sustainability strategies, focusing on business practices and product development geared towards healthy economic, social and environmental activities. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3657 Files in this item: 1
-
Muriithi, Samuel Muiruri (International Journal of Business and Management Invention, 2021)[more][less]
Abstract: Today’s business world is characterized by unpredictable, high volatility and cut-throat competition. The challenge to remain competitive, highly innovative and respond to dynamic customer needs has made organisations to pay particular attention to culture as a key foundation of their survival and sustainability. Numerous research have singled out culture as a significant determinant of organisational success and sustainability. As such, leading corporates are paying special attention to cultures as a source of competitive advantage and a foundation to employees’ attitude towards innovation, leadership, management and overall performance. For these businesses, culture is seen as a root of attaining sustainable competitive advantage and a springboard for satisfying rising dynamic competitive market needs, both local and global. Organisational culture gives identity and personality to organisations and is considered an asset that can’t be imitated by rivals. It is culture forms the foundational framework that governs operations, systems and management practices. However, besides growing recognition as critical to organisational or business survival and sustainability, there still exists a gap in literaturedue toof lack of clear understanding of the relationship between organisational culture and sustainable competitive advantage. This paper establishes that there a strong relationship between organisational culture and sustainable competitive advantage. Based on empirical literature and scholarly findings, the paper explores cultural elements that are critical to organisational competitiveness. The paper brings to out an area that has been greatly misunderstood and neglected in the past decades yet without it, successful future business operations are impossible. The paper has also developed a model of culture as a source of sustainable competitive advantage. The model emphasizes the need to identify relevant resources and competencies and integrate them in the organisational cultural practices to attain desired level of competitiveness URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3656 Files in this item: 1
-
Muriithi, Samuel Muiruri; Kenyon, Wendy (Biodiversity and Conservation, 2002)[more][less]
Abstract: Using an economic approach to provide a rationale for rainforest conservation has been a popular exercise in recent years. This paper uses such an approach to assess the net value of the Arabuko Sokoke Forest in Kenya. The economic benefits associated with the forest derived by local and global populations are estimated by combining evidence from existing studies and the results of a contingent valuation study carried out by the authors. These benefits are set against the cost of preserving the forest to the Kenyan Forest Department. Even when the opportunity cost of the forest land is omitted from the costs of forest preservation, and when the revenues generated from the Global Environment Facility (GEF) funded project are included, the costs of forest conservation outweigh the benefits. It is only when non-use and existence values are included (which are not realised by the Kenyan population) that the forest benefits exceed the costs. The paper concludes by arguing that, although some projects within the Arabuko Sokoke Forest have been successful in capturing some of the economic value associated with the forest, more needs to be done to design additional capture mechanisms so that a greater proportion of the global benefit of the forest can be realised by local populations and local governments URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3655 Files in this item: 1
-
Muriithi, Samuel Muiruri; Ndegwa, Catherine; Juma, Joy (The International Journal Of Humanities & Social Studies, 2018)[more][less]
Abstract: Small businesses play a vital role towards world economic development as they contribute between 40% to 50% of national Gross Domestic Product (GDP) as well as 70% to 90% of employment. However, besides their critical role, small business failure rate is alarming, ranging between 50% and 95% in their early years of existence. To reverse this trend, business incubators have provided required build capacity to start-up entrepreneurs and innovators thereby assuring their survival and growth. Having their roots in the 1950s and 1960s, business incubators have offered mentorship, skills building, technical support, training, facilities and venture capital. Globally there are over 7,000 incubators concentrating in various fields from science, economics, technology, marketing to business management. The success rate of businesses incubated is evident with 84% of graduates settling permanently in the community where they start businesses. The success rate of incubated businesses is evident in different countries such as New Zealand (87%), United States of America (85%) and Germany (90%) while South Africa and Brazil both have 80% success rate. Besides the success rate of businesses incubated, the failure rate of incubator businesses is alarming being as high as 90%. The failure is associated with lack of professional management, no sustainable growth plans, inappropriate technology and funds misappropriation. However, having played the role of the missing linking between business failure and success, incubators cannot be neglected. The purpose of this paper is to explore the roles of incubators, benefits, challenges and keys for their success. Based on empirical research, this paper gives an overview of the current state of incubators worldwide and their difficulties. The paper concludes with a case study of the National Environment Trust Fund (NETFUND) Incubation Centre which is a government initiative that has successfully support the development and promotion of green enterprises. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3654 Files in this item: 1
-
KoangYiek, Gordon; Irungu, Dancan Njagi; Mwamba, Dorcas (Journal of Strategic Management, 2017)[more][less]
Abstract: Training and development strategy is not given high priority in organizations. In public institutions, problem related to facility, participants, administration, lack of seriousness on the parts of the trainees, trainers, lack of communication with the superiors on training and different expectations from training are major obstacles which can create negative progress about training. Amidst the shortcomings there are numerous benefits that can be accrued through training and development and employee productivity, employee satisfaction, organizational efficiency and effectiveness. The purpose of this study was to assess the effect of training and development strategies on Organizational performance in Central Bank of South Sudan, Juba. Objective of the Study were; to establish training and development strategies that have been adopted by Central Bank of South Sudan. The research was conducted at Central Bank of South Sudan which is situated in Juba. The data was obtained from employees of the bank from both the management and Staff from different departments. The descriptive research design was used in the study. The target population was 111 employees while the sample population was 41 employees. The findings showed that several training and development strategies have been adopted by the Central Bank of South Sudan. The study recommends that evaluation of the training methods should be done before the training is given so that the impact of the training on performance is measured. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3653 Files in this item: 1
-
Irungu, Dancan Njagi; Marwa, Simmy Mwita; Ndegwa, Joyce Watetu; Kalei, Anne Favor Mumbua Wambua (International Journal of Economics, Commerce and Management, 2015)[more][less]
Abstract: The main objective of the study is to determine the influence of key decision maker attributes on the internationalization of medium sized firms. Key decision maker attributes have been underscored in much internationalization literature across different contexts as a principal feature that facilitates the process of Medium Enterprises internationalization. Medium enterprises play a significant role in creating a strong economic base to any country since they greatly contribute to employment creation. There is overwhelming evidence from the literature that the key decision maker plays a huge role in the internationalization of Medium enterprises. International entrepreneurship theory is the main theoretical framework which informs the study. The main variables that are examined in the study include key decision maker education, international experience and international business vision. Descriptive research design has been used in the study. The key CEOs of the Top 100 medium sized companies in the category of 2012 were the respondents of the study. The results of the study indicate that key decision maker attributes plays a significant role in the internationalization process of medium sized firms. The study concludes that the key decision maker is a major determinant of the firm’s ability to grow from the domestic market and internationalize its operations. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3652 Files in this item: 1
-
Mwangi, Alfred K.; Irungu, Dancan Njagi (International Journal of Economics, Commerce and Management, United Kingdom, 2016)[more][less]
Abstract: The purpose of this paper is to examine how the culture of strategic planning has made Equity bank to remain at the top of microfinance banking in Kenya, Africa and the world. Equity Bank has revolutionized the banking concept in Kenya and has made banking accessible to majority of the Kenyan and East African population. The bank has done well where others have failed especially on reaching out to the bottom of the pyramid segment. Equity bank has a very strong institutional culture of strategic planning that has helped in its growth and expansion. The employees in the bank treat their jobs like a calling to liberate the people of Africa and its either you fit or you don’t fit in that culture. This culture has seen employees giving their best in terms of time and energy which has seen the company record excellent performance over the years. The study used descriptive research design. The target group was the middle level managers in the Bank. Semi-structured questionnaires and key informant interviews were used as the instruments for data collection. Data was presented by the use of both descriptive and inferential statistics. The study revealed that Equity Bank had several strategic management practices which touched on formulation, implementation and evaluation. These included selfassessment, competition analysis, resource allocation, strategic management procedures. The bank had a very strong organizational culture which it leveraged on to push the strategic agenda. The study concludes by retaliating that adoption of strategic planning practices and institutionalization of a supportive institutional culture are great drivers of organizational performance. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3651 Files in this item: 1
-
Kitawi, Caroline Njambi; Irungu, Dancan Njagi (International Journal of Economics, Commerce and Management, 2015)[more][less]
Abstract: The main objective of this study is to find out the role of church owned businesses on sustainability of the church. Church organizations have over the years been faced with many challenges for survival and sustainability. As such, many churches today have ventured into businesses with an objective of enhancing their going concern. This move has been received with mixed reactions with some churches perceiving it as a good initiative for self-reliance while others perceiving it as an endeavour which is not within the church mandate. The study adopted descriptive research design. For primary data collection, questionnaires were administered and interview conducted. Descriptive statistics were used to present the findings. The results of this study indicate that church businesses do contribute to the sustainability of the church. The financial stability also implies that the church is put in a good position to achieve its biblical mandate in terms of reaching out, evangelising and also supporting the needy in the society. The study concludes that church businesses play a critical role in promoting sustainability of its operations. However, precaution has to be exercised so that the core mandate of the church which is about reaching out with the message of the gospel of Jesus Christ throughworship, discipleship, evangelism, missions and social action is not compromised at the expense of business pursuit. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3650 Files in this item: 1
-
Bowen, Michael; Mureithi, Samuel (KCA Journal of Business Management, 2009)[more][less]
Abstract: Small and Micro Enterprises (SMEs) play an important economic role in many countries. In Kenya, for example the SME sector contributed over 50percent of new jobs created in 2005 but despite their significance, SMEs are faced with the threat of failure with past statistics indicating that three out five fail within the first few months. This study sought to understand how SMEs manage the challenges they face. These challenges seem to change (evolve) according to different macro and micro conditions. This study employed stratified random sampling to collect data from 198 businesses using interviews and questionnaires. The data was analysed descriptively and presented through figures, tables and percentages. The findings indicate that SMEs face the following challenges; competition among themselves and from large firms, lack of access to credit, cheap imports, insecurity and debt collection. Credit constraint seems to be easing up when compared to previous researches. Relevant training or education is positively related to business success. The SMEs have the following strategies to overcome the challenges; fair pricing, discounts and special offers, offering a variety of services and products, superior customer service and continuously improving quality of service delivery. The research concludes that business success is a consequence of embracing a mix of strategies. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3649 Files in this item: 1
-
Kangogo, Jonah; Guyo, Wario; Bowen, Michael; Ragui, Mary (European Journal of Business and Management, 2013)[more][less]
Abstract: The floriculture industry is one of the most crucial sectors in Kenya’s economy. It contributes a significant percentage of the Gross National Product (GNP) and employs tens of thousands of workers. The industry has, however, faced a decline over the last five years. This empirical research had the overall objective of investigating the factors contributing to supply chain disruption in the industry and used Equator Flowers Limited in Eldoret, Kenya as a case study. The research applied descriptive survey research design and employed random sampling technique. The data collection was done with the aid of structured and semi-structured questionnaires containing relevant questions on the supply disruption phenomenon. The study found that the most significant amongst the factors contributing to supply chain disruption in the floriculture industry in Kenya are natural disasters, logistics process design, labor union actions and finally production function mechanics. To address supply chain disruptions, the study recommends: implementation of comprehensive business continuity plans to mitigate against the supply chain effects of natural disasters, development of logistical process redundancies, formulation of creative policies to contain labor unions agitations and investment in research to develop resilient and scalable production function mechanics. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3648 Files in this item: 1
-
Chesang, Laban K.; Naraidoo, Ruthira (Economic Modelling, 2016)[more][less]
Abstract: This paper exploits the Lucas’ (1973) signal extraction model to study the effect of uncertainty in the outputinflation trade-off on inflation, using a monetary model with asymmetric central bank preferences over inflation and output. We show that the implication of the uncertainty is two-fold: firstly, it causes the interaction of output and volatility of monetary policy to influence inflation movements so that, higher volatility in monetary policy causes inflation to rise. Secondly, as suggested in an optimal rule, it causes output to contract by less whenever inflation increases above the target, and to expand by less whenever inflation is below the target. We also find that the Reserve Bank’s asymmetric aversion to inflation stabilization explains inflation movements significantly, and that the monetary authority seems to penalize more for inflationary rather than deflationary pressures. Overall, the Bank’s deflationary bias would allow for a relatively flat output-inflation trade-off, which could be helpful for economic stability. URI: http://repository.daystar.ac.ke/xmlui/handle/123456789/3647 Files in this item: 1