IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2023i2p76-90.html
   My bibliography  Save this article

Investigating the Fisher’s Effect in Uganda: Evidence from ARDL Model

Author

Listed:
  • Mbongeni Zwelakhe Ngubane

    (University of Zululand)

  • Kehinde Damilola Ilesamni

    (University of Zululand)

Abstract

Given that no other study has conducted the same empirical work in Uganda, the study examined Fisher’s (1930) effect in this particular country. While inflation and the money supply served as the explanatory variables, the nominal interest rates served as the dependent variable. Through the use of data collected between 2011M7 and 2021M3, the ARDL model was employed in the study. The results showed that nominal interest rates indeed, in the long term, respond to predicted inflation rates on a oneto- one basis, with positive and statistically significant results. This indicates that Uganda is where Fisher’s effect is strongest. These findings demonstrate the validity of inflation targeting and make it easier for economic agents to predict inflation and the nominal interest rate. Granger causality, which has a unidirectional causality extending from inflation to nominal interest rates, likewise confirmed the same findings. The paper suggests that Uganda’s monetary policymakers shift to a full-fledged inflationtargeting regime at the second level of inflation targeting to anchor the commercial agents that will produce the highest amount of investment-driven growth.

Suggested Citation

  • Mbongeni Zwelakhe Ngubane & Kehinde Damilola Ilesamni, 2023. "Investigating the Fisher’s Effect in Uganda: Evidence from ARDL Model," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 19(2), pages 76-90, April.
    • Handle: RePEc:dug:actaec:y:2023:i:2:p:76-90
    as

    Download full text from publisher

    File URL: https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2306/2476
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2023:i:2:p:76-90. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.