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 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.

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.

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.

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 An Econometric Assessment of the Impact of Exchange Rate Depreciation on Inflation in Nigeria (1981-2017)

2019 ◽  
Author(s):  
Kenneth Apeh ◽  
Abubakar Muhammad Auwal ◽  
Nweze Nwaze Obinna
Keyword(s):  
Exchange Rate ◽  
Gross Domestic Product ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Domestic Product ◽  
Economic Policies ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact ◽  
Exchange Rate Depreciation

The present reality of the Nigerian economy is the fact that inflation has remained unabated in spite of all exchange rate measures that have been adopted by the monetary authority. This calls for investigation into the extent to which exchange rate impact on inflation in Nigeria. The research paper examined the impact of exchange rate depreciation on inflation in Nigeria for the period 1981–2017, using Auto Regressive Distributed Lag (ARDL) Bounds Test Cointegration Procedure. The research shows that inflation rate in Nigeria is highly susceptible to lagged inflation rate, exchange rate, lagged exchange rate, lagged broad money, and lagged gross domestic product at 5% level of significance. A long run relationship was also found to exist between inflation rate, gross domestic product and general government expenditure, indicating that the model has a self-adjusting mechanism for correcting any deviation of the variables from equilibrium. Therefore, this study concludes that exchange rate is an important tool to manage inflation in the country; thus, this paper recommends that policies that have direct influence on inflation as well as exchange rate policies that would checkmate inflation movement in the country, should be used by the Central Bank of Nigeria. Also, monetary growth and import management policies should be put in place to encourage domestic production of export commodities, which are currently short-supplied. In addition, policy makers should not rely on this instrument totally to control inflation, but should use it as a complement to other macro-economic policies.

scholarly journals The Determinant of Budget Fiscal Deficit of the Palestinian Authority and the Economic Factors Affecting It

2021 ◽  
Vol 12 (3) ◽  
pp. 63
Author(s):  
Khaled Hasan Zubdeh
Keyword(s):  
Gross Domestic Product ◽  
Current Account ◽  
Unemployment Rate ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Negative Relationship ◽  
Least Square ◽  
Domestic Product ◽  
Fiscal Deficit ◽  
Balance Of Trade

A prolonged fiscal deficit is an inheriting problem for the Palestinian economy. This leaves the Palestinian authorities unable to pay for salaries and other needed money to spend on the infrastructure, education, health, and other services. The main aim of this study is to examine the relationship between the budget deficit and some indicators, gross domestic product, balance of trade, inflation rate, unemployment rate, and current account, using ordinary least square and ARMA methods for collected quarterly data for the years 2000-2018, and applying the data to a number of other tests such as unit roots test, Johansen cointegration test, normal distribution test, heteroskedasticity test, Breusch-Pagan-Godfrey, variance inflation factors, etcetera, using Eviews10 program. The study’s main findings showed a long-run cointegration relationship between the budget deficit and the independent variables included in the study. The gross domestic product, balance of trade, and unemployment rate have a significant negative relationship with the budget deficit, while the remaining variables, inflation rate and current account, have a significant positive relationship with budget deficit.

scholarly journals Interest Rate Management and the Nigerian Economy (1986 — 2018)

2019 ◽  
pp. 1-15
Author(s):  
Kalu, Uko Kalu ◽  
Anyanwaokoro Mike
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Money Supply ◽  
Significant Relationship ◽  
Domestic Product ◽  
Ex Post ◽  
The Impact ◽  
Bound Test

This study sought to examine the impact of interest rate on the Nigeria’s economy during the pre and post Regulation periods (1986 – 2013). It also investigated the joint influence of Inflation, Investment, Exchange Rate, Money Supply and Monetary Policy Rate individually on the Gross domestic Product which was used a proxy for output as well as the causality between all the factors combined and gross domestic product. Ex post facto method was adopted In order to test the hypothesis, the researcher adopted Augmented Dickey Fuller, ARDL, Bound Test and Error Correction Model. The result showed that no significant relationship exists between Gross Domestic Product and Investment, Exchange Rate and Money Supply while still affirming that a significant relationship exist between Gross Domestic Product, Monetary Policy Rate and inflation. The eye of the authorities should be on Inflation at all times, Prudent management of our Oil earnings, adequate savings (Foreign Reserve) and investments as these will help stabilize the fluctuating exchange rate  with its consequent influence on interest rate and economic growth.

scholarly journals Monetary Policy Variables Relevance on Balance of Payments Adjustment in Nigeria 1980-2020

2021 ◽  
Vol 07 (08) ◽  
Author(s):  
Gerald, Chimezie Nwadike ◽  
◽  
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Gross Domestic Product ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Balance Of Payments ◽  
Real Gross Domestic Product ◽  
Domestic Credit ◽  
Balance Of Trade ◽  
The Government

This study examines monetary policy relevance on the Nigerian balance of payments adjustment, form 1980-2020. Objectives are; to examine the relevance of monetary policy variables such as Exchange rate, Inflation rate, Balance of trade, Real Gross Domestic Product and Domestic Credit on the Nigerian balance of payments adjustment. Evaluate the significant speed of adjustment of monetary policy variables such as Exchange rate, Inflation rate, Balance of trade, Real Gross Domestic Product and Domestic Credit on the balance of payments adjustment within the period under study. The study employed the following advanced econometric techniques; Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests, chow test, ECM model OLS model, statistical tests & Co-integration test. Based on the above econometric techniques conducted, it was observed that group unit root test result shows that variables used in the study became stationary after the first differenced at degree of order one I(I). There is Co-integration (long run relations) among variables used in the study. Our results indicated rejection of the two null hypotheses of this study and acceptation of the alternative three hypotheses that said; Nigerian monetary policy variables such as Exchange rate, Inflation rate, Balance of trade and Domestic Credit have significant relevance on the Nigerian balance of payments adjustment. Nigerian monetary policy variables used have significantly three years to adjust balance of payments adjustment in the Nigerian economy within the period of the study. The researcher recommends that; the need to manage domestic liquidity wisely in view of the tremendous pressure on the balance of payments of excess money. A determined effort to mobilize resources through private saving and the implementation of a prudent fiscal policy through efficient collection of tax revenues, rationalization of government expenditure towards growth enhancing and poverty reduction programmes will also enable the government to pursue its development programs without having to rely on the monetization of its budget deficit. Overall concentration on monetary tools solely should be reduced and employ other policy instruments to correct the balance of payment fluctuation. The government should also be cautious of budget deficit that are often time financed by internal borrowings.

scholarly journals The effect of a budget deficit on inflation: The case of Tanzania

2004 ◽  
Vol 7 (1) ◽  
pp. 100-116 ◽  
Author(s):  
M Solomon ◽  
WA De Wet
Keyword(s):  
Gross Domestic Product ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Causal Link ◽  
Domestic Product ◽  
Dynamic Simulations ◽  
Fiscal Deficits ◽  
High Inflation Rate ◽  
High Inflation ◽  
Over Time

The Tanzanian economy has remained one of the limited numbers of countries that has experienced a relatively high inflation rate, accompanied by high fiscal deficits for a prolonged period in the absence of any hyperinflation. This paper examines the deficit-inflation relationship in the Tanzanian economy and establishes the causal link that runs from the budget deficit to the inflation rate usingcointegration analysis over the period 1967-2001. Some dynamic simulations are done to gauge the effect of a change in the budget deficit and gross domestic product on inflation over time. Due to monetisation of the budget deficit, significant inflationary effects are found for increases in the budget deficit.

scholarly journals Direct and Reverse Causation of External Debt, Foreign Investment and Economic Growth in Nigeria, 1980-2017

2019 ◽  
pp. 1-12
Author(s):  
Nwachukwu Ngozi Patricia ◽  
Willy Ugwuanyi
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Error Correction ◽  
Foreign Investment ◽  
External Debt ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Ex Post ◽  
Integration Test ◽  
Bound Test

This study examined the direct and reverse relationship among external debt, foreign investment and economic growth in Nigeria, 1980-2017. The study is ex-post facto in design and adopted the autoregressive distributed lag (ARDL) model, Granger causality test, bound co-integration test and error correction representations. It was found that external debt and exchange rate were significant functions of Real Gross Domestic Product. Foreign Direct Investment and its lag were insignificant functions of real gross domestic product. The bound test following the ARDL framework, showed evidence in favor of co-integration among the variables regardless their stationarity properties. The rightly signed error correction term of 30.4% gives an indication that it takes about 3.28 years to restore the long-run equilibrium state on the real gross domestic product should there be any shock from the explanatory variables. It is therefore recommended among others that government should create an enabling environment that will attract foreign investment given the catalytic role it plays on economic growth in Nigeria.

Sign in / Sign up

Export Citation Format

Share Document