Relationship Between Public Debt And Financial Development In Kenya

Purpose: This study sought to analyze the relationship between public debt and financial development in Kenya. The specific objectives were examine association domestic development, connexion external Kenya's development. was underpinned on Financial Repression, Liberalization, Lazy Bank Hypothesis, Demand following hypothesis, MacKinnon theoretical model.
 Methodology: applied positivism philosophy explanatory research design. used country data hence no need for sampling. Data collected 1964 2019 from Central Bank. Descriptive inferential statistics study. Diagnostic tests such as Multi-collinearity, Auto-correlation, Normality, Unit root performed. Specifically, long-run short-run relationships analyzed using Auto-Regressive Distributive lag (ARDL) bound test cointegration. An error correction model association.
 Finding: suggested presence of a stable debt, interest rate. finding indicates that has statistically significant negative with both long short run. Also, positive development.
 Unique Contribution Theory, Practice Policy: affirms liberalization theory by Shaw Mackinnon (1973), advocating reduction direct government participation market credit restriction In addition study's findings are consistent lazy bank hypothesis Hauner (2009) addition, must ensure appropriate market-determined rate be debt. Furthermore, should continue fostering policies encourage its impacts positively