Abstract
This study provides a comprehensive analysis of the effects of financial liberalization on key macroeconomic indicators in Tanzania, specifically focusing on savings, investment, and economic growth. Utilizing extensive annual time series data from 1990 to 2022, the research employs the Autoregressive Distributed Lag (ARDL) method and incorporates bound testing procedures to ensure robust results. The analysis reveals several significant findings: financial liberalization has a positive impact on savings and promotes economic growth in the long-run, demonstrating its role as a catalyst for economic advancement in Tanzania. However, the study also uncovers a concerning trend: while savings and growth benefit from liberalization, investment is negatively affected in the long-term. The study’s implications emphasize the necessity for policymakers to facilitate financial liberalization by eliminating restrictions that impede competition and innovation in the financial sector to encourage long-term investments. Moreover, it underscores the importance of instituting a robust regulatory framework to ensure a secure and stable monetary sector.
Recommended Citation
Joseph, Cornel
(2024)
"An Assessment of Macroeconomic Effects of Financial Liberalization in Tanzania: 1990-2022,"
Journal of Humanities and Social Sciences: Vol. 13:
No.
2, Article 11.
DOI: 10.56279/13/2/0
Available at:
https://commons.udsm.ac.tz/jhss/vol13/iss2/11