The objectives of the study were to identify the significant variables that underlie economic growth in Nigeria, ascertain the stability of the economic growth model in Nigeria over the sample period, and examine the forecasting performance of the linear dynamic model. This study applies a linear dynamic model based on Pesaran et al. (2001) multivariate autoregressive distributed lag (ARDL) modelling technique to analyze the short-run and long-run dynamics of economic growth in Nigeria over the sample period between 1986 and 2013 using quarterly data. The empirical results show that economic growth in Nigeria finds explanation in adaptive expectations. The main determining variables of economic growth in Nigeria in the short-run and long-run are expected economic growth, population and trade openness. To achieve sustainable economic growth, it is suggested that government policies directed at improving the performance of the economy should largely consider the short-run and longrun behaviour of these variables and the policies should be pursued with high degree of transparency.
The aim of this study was to investigate the relationship between monetary policy instruments and economic growth in Nigeria using annual time series data from 1986 to 2018. Within this broad objective, the specific objectives were to ascertain the relationship between: (1) crude oil price and economic growth; (2) exchange rate and economic growth; (3) inflation rate and economic growth in Nigeria; (4) interest rate and economic growth in Nigeria; and (5) broad money supply and economic growth in Nigeria. Economic growth was proxied by real gross domestic product growth rate. The data were sourced from the publications of the Central Bank of Nigeria (CBN), Statista.com, and the World Bank. The estimation technique was the ordinary least squares (OLS)-based auto-regressive distributed-lag (ARDL) method with the aid of EViews software. The estimated model was evaluated using some diagnostic tests (serial correlation test, normality test, and stability test). The empirical results showed that only interest rate had a positive (0.42) and significant (10%) impact on economic growth in Nigeria in the short run. In the long run, previous gross domestic product and broad money supply had significant impacts on economic growth in Nigeria. The previous gross domestic product had a negative (-0.72) and significant (10%) impact while broad money supply had a negative (-0.000005) and significant (5%) impact on economic growth in Nigeria. In order to effectively use monetary policy instruments in achieving sustainable economic growth, it was recommended that the monetary authority should develop and implement an expansionary monetary policy capable of creating rapid growth of money supply which would lead to a decrease in interest rate which in turn would lead to increase in aggregate investment. These would lead to an increase in economic growth, if properly implemented.
This study empirically developed a multivariate autoregressive distributed-lag (ARDL) model and a univariate autoregressive integrated moving average (ARIMA) model for inflation in Nigeria, ascertained the stability of the models, and compared the performance of the models. This study used quarterly time series data from 1988 to 2017. The data were sourced from the publications of the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS).The study applied the ordinary least squares (OLS) method with the aid of EViews software for estimation purposes. The study found that: (1) ARDL (4, 2, 2, 1) and ARIMA (2, 1, 3) were the most appropriate models of inflation in Nigeria under model identification, identification, estimation, and diagnostic checking; (2) inflation in Nigeria was largely expectations-driven; and (3) inflation in Nigeria was influenced by the exchange rate, interest rate, and broad money supply (liquidity) both in the short-run and in the longrun.The study recommended that: (1) a "one-model-fits-all" for inflation rate dynamics in Nigeria should be discouraged and that different models should employed to complement one another; (2) regulatory authorities should ensure a high degree of transparency in monetary policy making and implementation; and (3) efforts should be made by the regulatory authorities to control money supply and ensure exchange rate and interest stability, in order to stem inflationary tendencies.
The objective of this study was to develop and analyze a regression model that explains the dynamics of foreign exchange reserves in Nigeria by examining the short-run and long-run impacts of some macroeconomic variables (exchange rate, inflation, interest rate, crude oil price, and real gross domestic product) on foreign reserves in Nigeria from 1986 to 2018. The data were sourced from the publications of the Central Bank of Nigeria (CBN) and World Bank. Unit root and co-integration tests were performed on the variables before estimation. An empirical multivariate autoregressive distributed-lag model (ARDL) was identified, specified, and estimated with the aid of EViews econometric software. Diagnostic tests for serial correlation (Breusch-Godfrey serial correlation LM test), normality (Jarque-Bera test), stability (CUSUM-of-squares test), and forecasting performance test were conducted to evaluate the estimated model. The study found that the estimated ARDL model could provide information on the behaviour of foreign exchange reserves in Nigeria. The regression results showed that none of the explanatory variables (exchange rate, inflation rate, interest rate, crude oil price, and real gross domestic product) shared contemporaneous and lagged relationship with foreign reserves dynamics in Nigeria. However, in the long run, only the previous value of foreign reserves was significant in explaining foreign reserves dynamics in Nigeria during the sample period. Given that foreign reserves play an important role in the design and evaluation of current and future macroeconomic policies aimed at achieving trade balance, the study makes the following recommendations: (1) government policies directed at managing and improving foreign reserves should largely consider the short-run and long-run behaviour of foreign reserves and these policies should be pursued with high degree of transparency because foreign reserves dynamics largely find explanation in adaptive expectation in Nigeria, (2) policy makers should ensure the
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.