scholarly journals Autoregressive Distributed Lag Modeling of the Effects of Some Macroeconomic Variables on Economic Growth in Nigeria

2020 ◽  
Vol 20 (2) ◽  
pp. 1-19
Author(s):  
Monday Osagie Adenomon ◽  
Rotimi Olalekan Ojo
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Abstract Research background: The relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However, there seems to be a short-run or long-run relationship among the macroeconomic variables. Purpose: This study investigated the long and short run impacts of the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (RGDPPC) (proxy for economic growth). Research methodology: This study applied a linear dynamic model Autoregressive Distributed Lag (ARDL) modeling technique to analyze the short-run dynamics and long-run relationship of economic growth in Nigeria over the sample period between 1984 and 2017 using annual secondary data extracted from the World Bank Development Indicators Report. Results: The empirical results showed that there was a long-run relationship between the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (proxy for economic growth) in Nigeria. The results further revealed that only the unemployment rate had a significant positive impact on real gross domestic product per capita in the long-run and the inflation rate had a significant negative impact on real gross domestic product per capita in the short-run. Novelty: Therefore, the study concluded that the unemployment rate and inflation rate proved to have significant impacts on economic growth in the long-run and short-run respectively. The formulation of policies to reduce unemployment through the adoption of a labour concentrated technique of production, entrepreneurship development and policy to keep the inflation rate a single digit.

scholarly journals Autoregressive Distributed Lag Modeling of the Effects of Some Macroeconomic Variables on Economic Growth in Nigeria

2019 ◽  
Author(s):  
Monday Osagie Adenomon ◽  
Rotimi Olalekan Ojo
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Research background: Relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However, there seems to be a short-run or long-run relationship among the macroeconomic variables.Purpose: This study investigated the impact of the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (RGDPPC) (proxy for economic growth) and proffered recommendations towards enhancing economic growth and to reduce the distasteful effects of inflation rate, unemployment rate and interest rate in Nigeria in this present time economic challenges.Research methodology: This study applied a linear dynamic model Autoregressive Distributed Lag (ARDL) modeling technique to analyze the short-run dynamics and long-run relationship of the economic growth in Nigeria over the sample period between 1984 and 2017 using annual secondary data extracted from World Bank Development Indicators Report (last updated January 2019).Results: The empirical results showed that there was long-run relationship between inflation rate, unemployment rate and interest rate on real gross domestic product per capita (proxy for economic growth) in Nigeria. The result further revealed that only unemployment rate had a significant positive impact on real gross domestic product per capita in the long-run and inflation rate had a significant negative impact on real gross domestic product per capita in the short-run.Novelty: Therefore, the study concluded that unemployment rate and inflation rate proved to have significant impacts on economic growth in the long-run and short-run respectively. Formulation of policies to reduce unemployment through the adoption of labour concentrated technique of production, entrepreneurship development and policy to keep the inflation rate at single digit.

Financial Deepening, Financial Intermediation and Nigerian Economic Growth: Time Variant Analysis

2019 ◽  
pp. 60-73
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Domestic Product ◽  
Financial Deepening ◽  
Causality Test ◽  
Real Gross Domestic Product ◽  
Long Run

This study examines financial deepening, financial intermediation and Nigerian economic growth. The main purpose is to examine the relationship between financial deepening and Nigerian economic growth while the specific objectives are to examine the impact of interest rate, capital market development, rational savings, credit to private sector and broad money supply on the growth of Nigerian. Secondary data of the variables were sourced from the publications of Central Bank of Nigeria (CBN) from 1981-2017. Nigerian Real Gross Domestic Product (RGDP) was used as dependent variable while Broad money supply (M2), Credit to Private Sector (CPS), National Savings (NS), Capital Market Capitalization (CAMP) and Interest Rate (INTR) was used as independent variables. Multiple regressions with E-view statistical package were used as data analysis techniques. Cointegration test, Augmented Dickey Fuller Unit Root Test, Granger causality test was used to determine the relationship between the variable in the long-run and short-run. R2, F – statistics and β Coefficients were used to determine the extent to which the independent variable affects the dependent variable. It was found from the regression result that Broad Money Supply, credit to private sector have position effect on the growth of Nigerian Real Gross Domestic Product while National Savings, Capitalization and Interest Rate on Nigeria Real Gross Domestic Product. The co-integration test revealed presence of long-run relationship among the variables, the stationary test indicated stationarity of the variables at level. The Granger Causality Test found bi – variant relationship from the dependent to the independent and from the independent to the dependent variables. The regression summary found 99.0% explained variation, 560.5031, F – statistics and probability of 0.00000. From the above, the study concludes that financial deepening has significant relationships with Nigerian economic growth. We recommend that government and the financial sector operators should make policies that will further deepen the functions of the financial system to enhance Nigerian economic growth.

scholarly journals The Determinants of Money Demand in Jordan: ARDL Approach

2019 ◽  
Vol 11 (1) ◽  
pp. 61
Author(s):  
Ali Mustafa Al-Qudah
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Money Demand ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Recursive Residuals ◽  
Bound Test

The current study examined the relationship between real money demand (M2) and its determinants represented by real gross domestic product, real interest rate, inflation rate and budget deficit in Jordan for the period (2000Q1-20018Q1). The study used unit root test, Autoregressive Distributive Lag (ARDL), cointegration and long run, bound test to examine the study hypotheses. ARDL cointegration equation and ARDL Bound test show that there is a long run relationship between money demand M2 and its determinants, real interest rate, inflation rate, budget deficit and real gross domestic product. The short run ARDL results shows that the past period of money demand has a negative and significant impact on money demand, while inflation rate and Gross domestic product have a positive and significant impact on money demand in Jordan. The long run ARDL results show that the inflation rate, real gross domestic product and budget deficit have a positive long run relationship with money demand (M2)and Its impact on (M2 ) is positive and statistically significant at 1 percent level, while interest rate has a negative and significant impact on Money demand (M2 ). Inflation rate, real gross domestic product, budget deficit and interest rate are good determinants for money demand M2. The cumulative sum (CUSUM) of recursive residuals and cumulative sum of squares (CUSUMQ) of recursive residuals confirm that the estimated money demand M2 model is stable.

scholarly journals Agricultural Output, Government Expenditure and Economic Growth in Nigeria: A Gregory-Hansen Cointegration Test with Structural Breaks

2021 ◽  
Vol 17 (41) ◽  
pp. 38
Author(s):  
Ali Salisu ◽  
Haladu Adahama Ibrahim
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Gross Domestic Product ◽  
Government Expenditure ◽  
Domestic Product ◽  
Agricultural Output ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Short Run ◽  
Positive Effect

The agricultural sector at large plays a significant role in augmenting economic growth, serves as a source of income to the people, provides food to the teeming population, serves as a source of raw materials to the industries and provides foreign exchange to the country, etc. The current study investigates the short-run and long-run relationship among agricultural output, Government expenditure, and Economic growth in Nigeria using annual time series data from 1985 to 2019. The Zivot-Andrew unit root test indicates that gross domestic product, agricultural output, and exchange rate are stationary at first difference while government expenditure is stationary at level. The Gregory-Hansen test with structural break has confirmed the existence of a cointegration relationship among the variables employed. The Autoregressive Distributive Lag (ARDL) model with break indicates that, in the short-run agricultural output has a negative and statistically insignificant effect on real gross domestic product Nigeria, government expenditure has a positive and statistically significant effect on real gross domestic product in Nigeria, and the exchange rate has a positive and statistically significant effect on real gross domestic product in Nigeria. The break-point coefficient has positive and statistically significant. The long-run result shows that agricultural output has a positive effect on the real gross domestic product in Nigeria, government expenditure has a positive effect on real gross domestic product in Nigeria, and the exchange rate has positive effects on the real gross domestic product in Nigeria. The break coefficient shows positive and statistically significant. The study recommends that the Nigerian government should reduce the lending rate on agriculture and provide incentives to the farmers, this will encourage farmers to borrow and consequently, agricultural output will increase and the Nigerian government should increase its expenditure on agriculture to boost the sector and achieve higher economic growth.

scholarly journals Value Creation through Public Debt and Economic Growth of Nigeria

2019 ◽  
Vol 5 (7) ◽  
pp. 63
Author(s):  
Oshadare S.A. ◽  
Ashamu S.O. ◽  
Raheem A.N. ◽  
Ojeaga P. ◽  
Ajayi J.A.
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Value Creation ◽  
Public Debt ◽  
External Debt ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Short Run ◽  
Internal Debt

<p>The study examined the effect of value creation through public debt on economic growth in Nigeria between 1986 and 2016 using Autoregressive Distributed Lag (ARDL). The variables used in the study are a real gross domestic product, internal debt, external debt and Total debt service of Nigeria. They were tested for stationarity using the Augmented Dickey-Fuller and Philip Perron test. The result showed that the variables are stationary at first differencing. Co-integration test was also performed and the result revealed the presence of co-integration between public debt and economic growth. The co-integration results show that public debt and economic growth have long run relationship. The findings of the ARDL model via short run model result and long-run model result between public debt and economic growth in Nigeria is that in the short run external debt and internal debt are negatively related to the real gross domestic product but has effect on the economic growth, external debt is negatively related but has no effect to the economic growth. Whereas in the long run model, internal debt and debt service are also negatively related to the real gross domestic product but significant to the economic growth, external debt is positively related but has no effect to the economic growth. The study concluded that public debt and economic growth have long-run relationship, and they are positively related if the government will create the value that citizens desired by being sincere with the loan obtained and use it for the development of the economy rather than channel the funds to their personal benefit.</p>

scholarly journals Non-Oil Sector and Economic Growth in Nigeria: The National Accounts Perspective

2021 ◽  
Vol 10 (1) ◽  
pp. 185
Author(s):  
Abel Oghenevwoke Ideh ◽  
Ndu Marvis Okolo ◽  
Emeka Steve Emengini
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Domestic Product ◽  
National Accounts ◽  
Model Stability ◽  
Real Gross Domestic Product ◽  
Long Run ◽  
Short Run ◽  
Oil Sector ◽  
The Impact

This study examines the impact of expansion in non-oil sector on sustainable economic growth of Nigeria economy. The study sourced data from the Central bank of Nigeria (CBN) statistical bulletin covering the periods of 2000 – 2019. An economic growth model was formulated using the study variables and the model was estimated using vector auto-regression  (VAR) techniques, other diagnostic tests such as  Roots of Characteristic Polynomial for VAR model stability, Augmented Dickey-Fuller test for time series stationarity, and granger causality tests were conducted to ensure the reliability of the model estimates. The analysis revealed that the estimated model is stable while the VAR and variance decomposition results shows that real gross domestic product is strongly endogenous in the short run but weakly endogenous in the long run. Further findings suggest that in the long run non-oil sector is strongly endogenous to real gross domestic product (92% contribution). The study, therefore, recommends diversification of the Nigerian economy by focusing more attention on agriculture, solid minerals, and service sectors as they tend to influence economic growth in the long run. More so, improved frameworks of accounting in areas of non-oil revenues are desirable for the accountancy profession.

Financial Deepening, Financial Intermediation and Nigerian Economic Growth: Time Variant Analysis

2019 ◽  
Vol 1 (1) ◽  
pp. 60-73
Author(s):  
Uzokwe Grace Onyinyechi
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Domestic Product ◽  
Financial Deepening ◽  
Causality Test ◽  
Real Gross Domestic Product ◽  
Long Run

This study examines financial deepening, financial intermediation and Nigerian economic growth. The main purpose is to examine the relationship between financial deepening and Nigerian economic growth while the specific objectives are to examine the impact of interest rate, capital market development, rational savings, credit to private sector and broad money supply on the growth of Nigerian. Secondary data of the variables were sourced from the publications of Central Bank of Nigeria (CBN) from 1981-2017. Nigerian Real Gross Domestic Product (RGDP) was used as dependent variable while Broad money supply (M2), Credit to Private Sector (CPS), National Savings (NS), Capital Market Capitalization (CAMP) and Interest Rate (INTR) was used as independent variables. Multiple regressions with E-view statistical package were used as data analysis techniques. Cointegration test, Augmented Dickey Fuller Unit Root Test, Granger causality test was used to determine the relationship between the variable in the long-run and short-run. R2, F – statistics and β Coefficients were used to determine the extent to which the independent variable affects the dependent variable. It was found from the regression result that Broad Money Supply, credit to private sector have position effect on the growth of Nigerian Real Gross Domestic Product while National Savings, Capitalization and Interest Rate on Nigeria Real Gross Domestic Product. The co-integration test revealed presence of long-run relationship among the variables, the stationary test indicated stationarity of the variables at level. The Granger Causality Test found bi – variant relationship from the dependent to the independent and from the independent to the dependent variables. The regression summary found 99.0% explained variation, 560.5031, F – statistics and probability of 0.00000. From the above, the study concludes that financial deepening has significant relationships with Nigerian economic growth. We recommend that government and the financial sector operators should make policies that will further deepen the functions of the financial system to enhance Nigerian economic growth.

scholarly journals AID AND GROWTH IN BANGLADESH: A REASSESSMENT

2018 ◽  
pp. 422-440
Author(s):  
Sharif Hossain ◽  
Rajarshi Mitra ◽  
Thasinul Abedin
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Real Income ◽  
Domestic Investment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Although the amount of foreign aid received by Bangladesh as a share of GDP has declined over the years, Bangladesh remains one of the heavily aiddependent countries in Asia. The results of most empirical studies that have examined the effectiveness of foreign aid or other forms of development assistance for economic growth have varied considerably depending on the econometric methodology used and the period of study. As the debate and controversy over aid-effectiveness for economic growth continue to grow, this paper reinvestigates the short-run and long-run effects of foreign aid received on percapita real income of Bangladesh over the period 1972–2015. A vector error correction model is estimated. The results indicate lack of any significant short-run and long-run relation between foreign aid and per-capita real income. Results further indicate short-run unidirectional causalities from per-capita real GDP to domestic investment (in proportion to GDP), from government expenditure (in proportion to GDP) to inflation rate, from inflation rate to domestic investment (in proportion to GDP), and from domestic investment to foreign aid (as percentages of GDP). Short-run bidirectional causality is observed between per-capita electricity consumption and per-capita real GDP, and between per-capita real GDP and government expenditure (in proportion to GDP).

Trade Liberalization and Economic Growth: The Scenario of the MINT Economies

Economy ◽  
2021 ◽  
Vol 8 (2) ◽  
pp. 35-48
Author(s):  
Innocent U Duru
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Trade Liberalization ◽  
Domestic Product ◽  
Causality Test ◽  
Significance Level ◽  
Real Gross Domestic Product ◽  
Policy Objectives ◽  
Per Capita ◽  
The Impact

This study investigated the impact of trade liberalization on economic growth for Mexico, Indonesia, Nigeria and Turkey from 1986 to 2020. The Autoregressive Distributed Lag Bounds approach to cointegration and Toda and Yamamoto causality test were utilized for this study. The long-run results revealed that there is no relationship between trade liberalization and real gross domestic product per capita except for Mexico and in this situation, the significance level was at 10%. The results of the causality test showed that no causality was detected between real gross domestic product per capita and trade liberalization for Mexico and Indonesia. A bidirectional causality between real gross domestic product per capita and trade liberalization was found for Nigeria whereas a unidirectional causality from trade liberalization to real gross domestic product per capita was revealed for Turkey. The no causality results for Mexico and Indonesia means that the policy objectives of trade liberalization and economic growth can be pursued independently in both economies. In addition, the bidirectional causality detected for Nigeria suggests that the policy objectives of trade liberalization and economic growth can be pursued together in Nigeria. Furthermore, the unidirectional causality from trade liberalization to real gross domestic product per capita found for Turkey implies that she employs trade liberalization policies effectively for objectives of economic growth, thus trade liberalization causes economic growth.

Infrastructure Investment and Economic Growth: Evidence from India

2016 ◽  
Vol 17 (1) ◽  
pp. 90-111
Author(s):  
Naliniprava Tripathy ◽  
Maram Srikanth ◽  
Lagesh Aravalath
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Error Correction ◽  
Capital Formation ◽  
Domestic Product ◽  
Government Revenue ◽  
Indian Economy ◽  
Long Run ◽  
Domestic Capital ◽  
Short Run

This study examines the long-run and short-run relationship between investment in infrastructure and economic growth in the Indian economy by using Auto Regressive Distributed Lag Model, Error Correction Model, and Granger Causality Test. The study reports that there is no short-run relationship among gross domestic product, gross domestic capital formation, revenue of the governmentand exports. However, the study finds that unidirectional causality exists between employment and gross domestic product; gross domestic productandinflation. It implies that employmentlevel in organised sector and inflationinfluence the economic growth in India for a short period. The study finds that there is a long-run relation exists between economic growth, domestic investment, inflation and government revenue. Therefore, emphasis should be placed on capital formation, government income and inflation to accelerate growth and development in the Indian economy. The error correction term is indicating that long term relationship is stable and any disequilibrium created in short termwill be temporary and will correct over a period. However, it is suggested to maintain balance among inflation,gross domestic product, employment, exports, savings, investment and government revenue to keep an economy growing. These findings have important policy implications since an economy built on investment in infrastructural development.

Sign in / Sign up

Export Citation Format

Share Document