| dc.description.abstract | This study analyses some selected factors that could influence the adoption of Gross
Domestic Product (GDP)-indexed bonds to finance budget deficits in Kenya. Its
specific objectives are to examine how the openness of the economy, capital market
development, government credibility and volatility of returns could influence the use
of GDP-Indexed Bonds to finance budget deficit in Kenya. It adopted the explanatory
research design with utilization of secondary data sources. Descriptive statistics such
as means, percentages, and frequencies; and inferential statistics such as Pearson
correlation and regression analysis were used to analyze the data. The findings show
that openness of the economy, government credibility, capital markets development
and volatility of returns had significant and positive relationships with the feasibility
of GDP-Indexed Bonds to finance budget deficits. The study concluded that, ensuring
openness of the economy, development of capital markets, credibility of the
government as well as the predictability and steadiness of stocks returns could
enhance the adoption of GDP-Indexed bonds to finance budget deficits in Kenya. It
was recommendations government should focus on strategies to curb corruption,
ensure stable fiscal rules, openness of the economy, as well as checking market
shocks to enhance stable economy. | en_US |
