Real estate development, human capital, and economic growth in Kenya

The purpose of this study is to investigate the effect of real estate development and human capital on economic growth in Kenya by endogenizing the central bank rate and inflation as additional key variables that affect economic growth. This paper employs an autoregressive distributed lag (ARDL) model to analyze quarterly time series data spanning from the first quarter of 2009 to the fourth quarter of 2019. The results reveal that real estate development has a positive and significant impact on economic growth in the short run. The study also establishes a long-run relationship between real estate development, the central bank rate, inflation and economic growth. Specifically, the study establishes that inflation and the central bank rate are negatively and significantly associated with economic growth in the long run. This study makes significant progress in providing empirical evidence on the effect of real estate development, human capital, the central bank rate and inflation on economic growth in Kenya. Additionally, these findings are useful to all economies across the world, particularly developing countries such as Kenya. This study recommends the formulation of policies to encourage investment in real estate development and human capital, as they are crucial for economic growth in Kenya and other developing countries.