Economics and Business
ISSN 2775-9237 (Online)
Published: 09 December 2022
The Nexus Between Some Selected Macroeconomic Variables on Growth Output in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach
Charles O. Aronu, Godspower O. Ekwueme, Olasunkanmi A. Bilesanmi, Olatunji T. Arowolo
Chukwuemeka Odumegwu Ojukwu University, Nnamdi Azikiwe University, Petroleum Training Institute, Lagos State University of Science and Technology
Download Full-Text Pdf
Keywords: Economic Growth, Exchange Rate, Growth Output, Inflation Rate, Money Supply
Macroeconomics remains an evolving science, but the goals of macroeconomic policy are consistent around the world. These include price stability, currency stability, unemployment, the balance of payments, and growth output. This study X-rayed the link between Real Gross Domestic Product (RGDP) which was considered a measure of growth output, Exchange Rate (EXR), Inflation Rate (IFR) and Money Supply (M2) for the current republic in Nigeria. The objectives of the study include: examining the short-run and long-run impact of growth output (RGDP) on EXR, IFR and M2 in Nigeria. A secondary source of data collection was employed for the study. The tools employed for data analysis include the Augmented Dickey-Fuller (ADF) test, Jarque-Bera test, Autoregressive Distributed Lag (ARDL) Co-integration technique, and the error correction parameterization of the ARDL model. The result of the Jarque-Bera test showed that the variables were approximately normally distributed. The findings showed that growth output (RGDP) was cointegrated with EXR, IFR and M2 and the existence of a long-run relationship amongst the variables. The study concludes that while seeking to foster economic growth, Nigerian banks should commit to their mandate of price stability and improve their regulatory framework to ensure a strong financial sector with effective intermediation.
Antwi, S., Mills, E.F. and Zhao, X. (2013). Impact of macroeconomic factors on economic growth in Ghana: A Cointegration Analysis, International Journal of Academic Research in Accounting, Finance and Management Sciences, 3 (1): 35–45.
Aronu, C. O., Arhovwon, L. O., Emunefe, J. O., Ekwueme, G. O. and Nkechi Udochukwu Otty, N. U. (2020). On the Determinants of Economic Openness in Nigeria, Asian Journal of Economics, Business and Accounting, 18(3): 42-53.
Aroriode, O. R and Ogunbadejo, H. K. (2014). Impact of macroeconomic policy on agricultural growth in Nigeria, IOSR Journal of Agriculture and Veterinary Science, 3 (7): 11-46
Ebikila, S., Agada, F. A. Lucky, T. and Matthew, B. (2018). Impact of money supply on some macroeconomic variables on the Nigerian economy, International Journal of Scientific and Research Publications, 8 (8): 18-32.
Gatawa, N.M., Akinola, A. and Muftau, O. O. (2017). Impact of Money Supply and Inflation on Economic Growth in Nigeria (1973-2013), IOSR Journal of Economics and Finance (IOSR-JEF), 8(4): 22- 55.
Jibril, M. A. (2019). Determinants of Exchange Rate Fluctuation in Nigeria: Evidence From Sticky-Price Monetary Model, Nigerian Journal of Management Sciences, 7(1): 270-277.
Nse S. Udoh and Anietie S. Isaiah (2018). A Predictive Model for Inﬂation in Nigeria, CBN Journal of Applied Statistics, 9(2): 103-129.
Obidike, M. O. and Nduka, J. A. (2022). Effect of Selected Macroeconomic Variables on the Nigeria in Economy 1987-2020, International Journal of Business & Law Research, 10(3):84-96.
Olawale B. A. (2015). Impact of macroeconomic variables on human capital development in Nigerian using the vector autoregressive approach, International Journal of Research in Humanities and Social Studies, 3(2): 12-26.
Pesaran, M. H., Shin, Y. and Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Long Run Relationships, Journal of Applied Econometrics, 16(3): 289-326. https://doi.org/10.1002/jae.616 2001.
Vorlak, L., Abasimi, I., and Fan, Y. (2019). The Impacts of Exchange Rate on Economic Growth in Cambodia, International Journal of Applied Economics, Finance and Accounting, 5(2), 78–83. https://doi.org/10.33094/8.2017.2019.52.78.83
Yousfat A. (2015). Money Growth and Inflation: Empirical Evidence from GCC Region, European Journal of Business and Social Sciences, 4(7): 142-153.