Sustainable Economic Growth and Financial Stability: A Critical Perspective with Special Reference to Sub-Saharan Africa

This critical appraisal summarizes and reviews eight published articles for the award of a doctoral degree, based on published works. These articles examined different issues surrounding two monetary policy objectives: sustainable economic growth and financial stability. These policy objectives lay more emphasis on Sub-Saharan Africa, as six papers were devoted to the region. The first policy objective identifies capital flows as an important source of economic growth. The two types of capital flows examined in this study were Foreign Direct Investments (FDI) and remittances. This theme addressed two issues that are inter-related: (i) the determinants and consequences of capital inflows; and (ii) the dynamics of dollarization. There are four main shortcomings of the previous studies. First, determinants of FDI have been limited to economic variables. Second, studies have mainly used regional/continental dataset without recourse to sub-regions, implying high level of data aggregation. Third, remittances basedstudies have ignored the ability of remittances to solve some problems, such as investment volatility and business cycles. Fourth, there are some features of dollarization (asymmetry, structural breaks and threshold effect), though not apparent, but exist, and not captured by the previous studies. The inability to capture these features could lead to wrong policy formulation. The second policy objective sought to provide models that would accurately make stock market predictions. The main shortcoming of the literature is the inability to capture some inherent characteristics of the predictors, such as persistence, endogeneity and conditional heteroscedasticity. In addition, this literature has also not taken cognisance of recent development in the financial markets e.g. the emergence of cryptocurrencies and financialization of the commodity markets. Findings from the first policy objective are as follows: Institutional framework is an important determinant of the two types of capital flows. In addition, capital flows accompanied by improved institutional level are able to curtail the rising influence of investment volatility and business cycles. Accounting for some features makes dollarization in Sub-Saharan Africa (SSA) defy theoretical underpinnings. The findings from the second theme suggested that Bitcoin and quantitative easing policy of the monetary authorities and oil price were good predictors of stock market performance. Results further showed that investors react more to positive changes in oil price. Policy implications, research limitations and future research directions were discussed.

Grantor dc:publisher

Oxford Brookes University

Year dc:date

2020

Author dc:creator

• Raheem, Ibrahim Dolapo

Contributors dc:contributor

• le Roux, Sara

Statement dc:rights

• All rights reserved

Language dc:language

en

DOI dc:identifier

https://doi.org/10.24384/039z-8h24

OAI identifier oai:identifier

tle:3134f959-5d32-43c2-8f25-d0229d21cded:d6bd9758-527a-46cd-bfe2-c433766e8fca:1