Human Capital and Macroeconomic Stability in Tanzania: Vector Error Correction Model (VECM)

Fredrick Nakoli Msalilwa, Sagire Wambura, Frank Haukila — Tue, 07 Jul 2026 00:00:00 +0000

The study examines the relationship between human capital development and macroeconomic stability in Tanzania, employing a Vector Error Correction Model (VECM) approach. Human capital, encompassing education, health, and workforce skills, is critical for economic growth and resilience. Despite significant investments in education and healthcare, Tanzania continues to face macroeconomic instability marked by inflation, unemployment, and economic volatility. The study spans 1985–2024, revealing that while human capital has grown due to reforms and technological advancements, macroeconomic instability persists. This suggests that the benefits of human capital investments are not fully realized in fostering economic stability. The findings highlight both short- and long-term dynamics, with mixed evidence on causality between human capital and economic growth. The research underscores the complexity of translating human capital improvements into stable macroeconomic outcomes and emphasizes the need for targeted policies. Recommendations include prioritizing fiscal policies over monetary interventions, enhancing institutional frameworks, and fostering inclusive growth strategies.

Short-Run and Long-Run Dynamics of Sri Lanka’s Tea Exports: Evidence from an ARDL Model

K. A. D. B. Shaminda, H. G. R. Sathsarani, K. A. D. J. Shalinda — Thu, 09 Jul 2026 00:00:00 +0000

Ceylon tea is world-famous and a major contributing factor to Sri Lanka’s economy, but the amount of tea exported has been dropping for several years. This study looks at three main reasons behind this decline, namely yearly exchange rate, economic growth (GDP), and yearly rainfall (YR). The Autoregressive Distributed Lag (ARDL) model was used to examine annual time-series data from 2000 to 2024. The main sources of information used in this study are the World Bank, the Central Bank of Sri Lanka (CBSL), and the Tea Board of Sri Lanka. The model’s results demonstrate that, both in the short and long term, changes in the exchange rate have a significantly negative effect on tea export volume. This occurs because a depreciating currency makes imported agricultural supplies more expensive, which ultimately limits how much tea can be produced. Yearly rainfall demonstrates a positive short-run influence on exports but yields no significant long-run effect, reflecting the adaptive capacity of tea plantations over time. The economic growth rate shows a significant positive impact in the short-term and long-term. This indicates how macroeconomic expansion strengthens export logistics, productive capacity, and trade infrastructure. A key limitation is the exclusion of structural break variables to account for the 2021 fertilizer import ban and the 2021–2022 economic crisis.

Journal of Economic Studies and Financial Research (e-ISSN: 2584-1629)

Human Capital and Macroeconomic Stability in Tanzania: Vector Error Correction Model (VECM)

Short-Run and Long-Run Dynamics of Sri Lanka’s Tea Exports: Evidence from an ARDL Model