The Nigerian Government both previous and present has introduced several policies and programmes to reduce or proffer remedial measures to militate against the negative impact of high inflationary levels on the Nigerian economy. All these measures have not led to a productive result as the inflation rate has continued to sour higher over the years. This paper aimed at examining the economic influence of the determinant factors that influence inflationary trends that are multi-dimensional and dynamic which continue to defy solutions. The data used for this work was sourced from the National Bureau of Statistics and Central Bank of Nigeria, from 1983 to 2020. The ordinary least square approach was used to analyze the data and the result shows that consumer’s price index, interest rate and total export has a positive effect on Nigeria inflation, but only the Consumer’s Price Index (CPI) have a statistically significant effect on the Nigeria inflation at 99% confidence interval. Result also shows that the exchange rate, foreign reserve, money supply, real GDP, real income and total imports has a negative effect though not statistically significant on the Nigeria inflation rate. The result of the granger causality test shows exchange rate and total imports to granger cause Nigeria inflation. It is recommended that Government should improve locally manufacture products to meet international demands to reduce total imports.
Currency fluctuations and inflation are the natural norm for most major economies. Numerous factors influence economic growth, including a country’s exchange rate system performance, the outlook for inflation, and interest rate differentials. These are the most significant factors that hinder the economic growth of every nation. As a result, this analysis investigates the impact of exchange rate and inflation on Nigeria’s growth performance from 1986 to 2021. Impulse response and variance decomposition were estimated. The real gross domestic product (RGDP) was used as a proxy for growth performance, while the inflation rate (IFNR), real exchange rate (REXR), and interest rate (INTR) were also used as proxies. The results of impulse response and variance decomposition estimates in the short-run (third quarter) and long-run (tenth quarter) show that real exchange rate D(REXR), INTR, and IFNR all have a positive impact on RGDP variation, with values of 13.38%, 31.88%, and 22.40%, respectively, in the third quarter. In the long run (the 10th quarter), REXR contributed approximately 28.76% of the variation in RGDP. The interest rate contributed 24.14%, while the IFNR has contributed about 28.27% of the variation in RGDP in the long run. Therefore, summing the contributions of REXR, INTR, and INFR to RGDP, these variables contributed about 81.17% of the variation in RGDP in the long run. Hence, the research concluded that REXR, INTR, and IFNR have a positive effect on growth performance as proxied by RGDP in Nigeria within the period of the research. The research recommended that the government should provide a policy that will reduce the excess growth of aggregate demand (AD) in the economy, which will reduce inflationary pressure, in order to achieve the sustainable development goals (SDGs) of 2030 in Nigeria, which include restoring economic growth and macroeconomic stability through macroeconomic variables such as the exchange rate, inflation, and other significant variables.
Effect of Government Policies on Price Stability in Nigeriaijtsrd
This study examined the effect of monetary and fiscal policies on price stability in Nigeria using a data rich framework spanning from 1986 2020. The main problem with the macro economic policies that prompted this study was the fact that despite the series of the CBN Monetary Policy Committee decisions and government tax and expenditure implementation there is apparently no useful effect on inflation price . The study employed Auto regression Distributed Lag ARDL Bound Test for Co integration of data analysis depending upon the time series properties of the data that confer mixed order of integration in addition to the conduct of the unit root test and Error Correction Model ECM estimation. The ADF test revealed that LNCPI, EXR, GSDMD, GEXP, GTX and M2 were stationary at 1 1 while RIR, MPR and BOP at 1 0 . Pesaran, Shin and Smith 2001 established that the ARDL bounds technique allows a mixture of 1 1 and 1 0 variables as regressors. Hence, we proceed to perform the ARDL bounds test for integration. The results of the ARDL bounds revealed that the null hypotheses were all rejected implying that a long run effect exists among monetary and fiscal policies variables and CPI in a multivariate framework. ECM coefficient of 0.2942 conforms with expectation. Durbin Watson statistic 0f 1 9925 revealed that the model seems not to have any case of autocorrelation. The result of our analysis shows that fiscal policy rather than monetary policy exerts a more potent effect on price stability in Nigeria. The study recommends that both monetary and fiscal policies should be complementary in order to be effective in taming inflation in Nigeria. Onehi, Damian Haruna | Ibenta, Steve Nkem | Adigwe, Patrick, K. | Emejulu, Ikenna Justin "Effect of Government Policies on Price Stability in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-1 , February 2023, URL: https://www.ijtsrd.com/papers/ijtsrd52766.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/52766/effect-of-government-policies-on-price-stability-in-nigeria/onehi-damian-haruna
EFFECTIVE MONETARY POLICY AS A RECIPE FOR MACROECONOMIC STABILITY IN NIGERIApaperpublications3
Abstract: The basic objective of this paper was to investigate effective monetary policy as a recipe for macroeconomic stability in Nigeria, using annual time series data from 1981 to 2014. The paper employs OLS methodology with all the BLUE assumption. The results show that considering the magnitude, 1% increase in RGDP (proxy for economic growth) is brought about by 0.86% increase in narrow money supply (M1), 0.63% increase in broad money supply (M2), 258% decrease in inflation rate (INFLARATE), 1276.3% increase in lending rate (LEDRATE), and 143.9% increase in gross fixed capital formation. This implies that an increase in lending rate and other related variables will lead to a significant increase in real GDP, proxy for economic growth in Nigeria. The estimated value of R2 (goodness of fit) of 0.67 or 67% shows that 67% systematic variation in Real GDP is caused by variation in narrow money supply, broad money supply, inflation rate, lending rate, and gross fixed capital formation. This indicates that indeed, monetary policy has an effect on macroeconomic stability in Nigeria. The study seems to suggest that concerted efforts should be made by the government to focus on increment in narrow and broad money supplies which will aid in the financing of the country’s monetary growth, balancing the price increase, stimulating increased spending, and further enhancing the country’s macroeconomic variables.
Long Run Impact of Exchange Rate on Nigeria’s Industrial Outputiosrjce
While many scholars have carried out a lot of research on the impact of exchange rate volatility and
price shocks on economic growth, this study departs from previous studies and seeks to provide suggestions for
Nigerian policy makers on the attainment of an ideal exchange rate necessary to boost industrialization and
industrial output. The economies of all the countries of the world are linked directly or indirectly through asset
and goods markets. This linkage is made possible through trade and foreign exchange. The price of foreign
currencies in terms of a local currency (i.e. foreign exchange) is therefore important to the understanding of the
growth trajectory of all countries of the world. The consequences of substantial misalignments of exchange rates
can lead to output contraction and extensive economic hardship. These therefore, bring up the issue of an ideal
exchange rate necessary for the achievement of a set of diverse objectives - economic growth, containment of
inflation and maintenance of external competiveness. This study employed the use of the ordinary least square
technique to examine the impact of exchange rate stability on industry output in Nigeria using annual time
series data from 1980 to 2013. The result of the study showed that domestic capital, foreign direct investment,
population growth rate, and real exchange rate were significant determinants of industrial output. The changes
in external balance and inflation were of little or no consequences to industrial output. Based on the findings,
the researcher recommended that conscious efforts should be made by government to fine-tune the various
macroeconomic variables in order to provide an enabling environment that stimulates industrial output and
eventual economic growth.
Monetary Policy and Trade Balance in NigeriaYogeshIJTSRD
Nigeria apex bank Central Bank of Nigeria CBN has continued to battle with the job of reviving the ailing economy and putting it on the path of growth. The economy has witnessed unprecedented job loss, rising poverty level, accelerating inflation, sluggish economic growth and disequilibrium in the balance of trade. The study therefore examine the effect of monetary policy on trade balance in Nigeria. Specifically the study ascertained the extent to which inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria using an econometric regression model of the Ordinary Least Square OLS . From the result of the OLS, it is observed that monetary policy rate, demand deposit, liquidity ratio and exchange rate have a significant positive impact on foreign trade in Nigeria. This means that increases in monetary policy rate, demand deposit, liquidity ratio and exchange rate, will lead to increase in foreign trade in Nigeria. On the other, inflation rate and interest rate has a significant negative impact on foreign trade in Nigeria, meaning that as inflation rate and interest rate increases, will be bring about a decline in foreign trade in Nigeria. Based on the findings of this study, the study recommends that the government should employ a contractionary monetary policy to fight inflation by reducing the money supply in the country through decreased bond price. inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria. The government should intervene in the foreign exchange market in order to build reserves for themselves or provide them to the bank to help stabilize the exchange rate. The government should strive to improve trade performance in the short and long run. They should also reduce government spending and tax capital inflow. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Monetary Policy and Trade Balance in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45080.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45080/monetary-policy-and-trade-balance-in-nigeria/edokobi-tonna-david
Effect of Monetary Policy on Economic Growth in Nigeriaijtsrd
"The chequered history of the Nigeria monetary policy has created a visible asymmetry in the two known monetary regimes before and after SAP in the country. Years after the Structural Adjustment Programme SAP , the Nigeria economy grew to become the strongest economy in Africa and suddenly plunging into recession, a situation that have adversely affected the growth and development of the economy by ways of rising unemployment rate, soaring poverty and swollen external debt, thus suggesting that the failure of the monetary policy in curbing price instability has caused growth instability as Nigeria's record of growth and development has become very poor. This study therefore examines the effect of monetary policy on economic growth in Nigeria using secondary data covering the period of 1980 2017 that were sourced from the Central Bank of Nigeria statistical bulletin. The model's estimates were estimated via multiple econometric model of the ordinary least square to ascertain the effect of money supply, credit in the economy, interest rate on credit, infrastructure, inflationary rate, external debts, price index on growth in Nigeria. The results show that money supply, interest rate on credit, infrastructure and external debt were statistically significant in explaining its impacts on economic growth while other variables used in the study were all found to be statistically insignificant in explaining the growth rate of the Nigerian economy. The study recommends among others that for effective operation of the monetary policy measures in the Nigerian economy, the Central Bank of Nigeria should be granted full autonomy on its monetary policy functions. Partial autonomy should be replaced with full autonomy for the central banks in the developing economies at large which is invariably subjected to government interference and its politics. Onwuteaka, Ifeoma Cecilia | Okoye, P. V. C | Molokwu, Ifeoma Mirian ""Effect of Monetary Policy on Economic Growth in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd22984.pdf
Paper URL: https://www.ijtsrd.com/humanities-and-the-arts/economics/22984/effect-of-monetary-policy-on-economic-growth-in-nigeria/onwuteaka-ifeoma-cecilia"
Currency fluctuations and inflation are the natural norm for most major economies. Numerous factors influence economic growth, including a country’s exchange rate system performance, the outlook for inflation, and interest rate differentials. These are the most significant factors that hinder the economic growth of every nation. As a result, this analysis investigates the impact of exchange rate and inflation on Nigeria’s growth performance from 1986 to 2021. Impulse response and variance decomposition were estimated. The real gross domestic product (RGDP) was used as a proxy for growth performance, while the inflation rate (IFNR), real exchange rate (REXR), and interest rate (INTR) were also used as proxies. The results of impulse response and variance decomposition estimates in the short-run (third quarter) and long-run (tenth quarter) show that real exchange rate D(REXR), INTR, and IFNR all have a positive impact on RGDP variation, with values of 13.38%, 31.88%, and 22.40%, respectively, in the third quarter. In the long run (the 10th quarter), REXR contributed approximately 28.76% of the variation in RGDP. The interest rate contributed 24.14%, while the IFNR has contributed about 28.27% of the variation in RGDP in the long run. Therefore, summing the contributions of REXR, INTR, and INFR to RGDP, these variables contributed about 81.17% of the variation in RGDP in the long run. Hence, the research concluded that REXR, INTR, and IFNR have a positive effect on growth performance as proxied by RGDP in Nigeria within the period of the research. The research recommended that the government should provide a policy that will reduce the excess growth of aggregate demand (AD) in the economy, which will reduce inflationary pressure, in order to achieve the sustainable development goals (SDGs) of 2030 in Nigeria, which include restoring economic growth and macroeconomic stability through macroeconomic variables such as the exchange rate, inflation, and other significant variables.
Effect of Government Policies on Price Stability in Nigeriaijtsrd
This study examined the effect of monetary and fiscal policies on price stability in Nigeria using a data rich framework spanning from 1986 2020. The main problem with the macro economic policies that prompted this study was the fact that despite the series of the CBN Monetary Policy Committee decisions and government tax and expenditure implementation there is apparently no useful effect on inflation price . The study employed Auto regression Distributed Lag ARDL Bound Test for Co integration of data analysis depending upon the time series properties of the data that confer mixed order of integration in addition to the conduct of the unit root test and Error Correction Model ECM estimation. The ADF test revealed that LNCPI, EXR, GSDMD, GEXP, GTX and M2 were stationary at 1 1 while RIR, MPR and BOP at 1 0 . Pesaran, Shin and Smith 2001 established that the ARDL bounds technique allows a mixture of 1 1 and 1 0 variables as regressors. Hence, we proceed to perform the ARDL bounds test for integration. The results of the ARDL bounds revealed that the null hypotheses were all rejected implying that a long run effect exists among monetary and fiscal policies variables and CPI in a multivariate framework. ECM coefficient of 0.2942 conforms with expectation. Durbin Watson statistic 0f 1 9925 revealed that the model seems not to have any case of autocorrelation. The result of our analysis shows that fiscal policy rather than monetary policy exerts a more potent effect on price stability in Nigeria. The study recommends that both monetary and fiscal policies should be complementary in order to be effective in taming inflation in Nigeria. Onehi, Damian Haruna | Ibenta, Steve Nkem | Adigwe, Patrick, K. | Emejulu, Ikenna Justin "Effect of Government Policies on Price Stability in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-1 , February 2023, URL: https://www.ijtsrd.com/papers/ijtsrd52766.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/52766/effect-of-government-policies-on-price-stability-in-nigeria/onehi-damian-haruna
EFFECTIVE MONETARY POLICY AS A RECIPE FOR MACROECONOMIC STABILITY IN NIGERIApaperpublications3
Abstract: The basic objective of this paper was to investigate effective monetary policy as a recipe for macroeconomic stability in Nigeria, using annual time series data from 1981 to 2014. The paper employs OLS methodology with all the BLUE assumption. The results show that considering the magnitude, 1% increase in RGDP (proxy for economic growth) is brought about by 0.86% increase in narrow money supply (M1), 0.63% increase in broad money supply (M2), 258% decrease in inflation rate (INFLARATE), 1276.3% increase in lending rate (LEDRATE), and 143.9% increase in gross fixed capital formation. This implies that an increase in lending rate and other related variables will lead to a significant increase in real GDP, proxy for economic growth in Nigeria. The estimated value of R2 (goodness of fit) of 0.67 or 67% shows that 67% systematic variation in Real GDP is caused by variation in narrow money supply, broad money supply, inflation rate, lending rate, and gross fixed capital formation. This indicates that indeed, monetary policy has an effect on macroeconomic stability in Nigeria. The study seems to suggest that concerted efforts should be made by the government to focus on increment in narrow and broad money supplies which will aid in the financing of the country’s monetary growth, balancing the price increase, stimulating increased spending, and further enhancing the country’s macroeconomic variables.
Long Run Impact of Exchange Rate on Nigeria’s Industrial Outputiosrjce
While many scholars have carried out a lot of research on the impact of exchange rate volatility and
price shocks on economic growth, this study departs from previous studies and seeks to provide suggestions for
Nigerian policy makers on the attainment of an ideal exchange rate necessary to boost industrialization and
industrial output. The economies of all the countries of the world are linked directly or indirectly through asset
and goods markets. This linkage is made possible through trade and foreign exchange. The price of foreign
currencies in terms of a local currency (i.e. foreign exchange) is therefore important to the understanding of the
growth trajectory of all countries of the world. The consequences of substantial misalignments of exchange rates
can lead to output contraction and extensive economic hardship. These therefore, bring up the issue of an ideal
exchange rate necessary for the achievement of a set of diverse objectives - economic growth, containment of
inflation and maintenance of external competiveness. This study employed the use of the ordinary least square
technique to examine the impact of exchange rate stability on industry output in Nigeria using annual time
series data from 1980 to 2013. The result of the study showed that domestic capital, foreign direct investment,
population growth rate, and real exchange rate were significant determinants of industrial output. The changes
in external balance and inflation were of little or no consequences to industrial output. Based on the findings,
the researcher recommended that conscious efforts should be made by government to fine-tune the various
macroeconomic variables in order to provide an enabling environment that stimulates industrial output and
eventual economic growth.
Monetary Policy and Trade Balance in NigeriaYogeshIJTSRD
Nigeria apex bank Central Bank of Nigeria CBN has continued to battle with the job of reviving the ailing economy and putting it on the path of growth. The economy has witnessed unprecedented job loss, rising poverty level, accelerating inflation, sluggish economic growth and disequilibrium in the balance of trade. The study therefore examine the effect of monetary policy on trade balance in Nigeria. Specifically the study ascertained the extent to which inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria using an econometric regression model of the Ordinary Least Square OLS . From the result of the OLS, it is observed that monetary policy rate, demand deposit, liquidity ratio and exchange rate have a significant positive impact on foreign trade in Nigeria. This means that increases in monetary policy rate, demand deposit, liquidity ratio and exchange rate, will lead to increase in foreign trade in Nigeria. On the other, inflation rate and interest rate has a significant negative impact on foreign trade in Nigeria, meaning that as inflation rate and interest rate increases, will be bring about a decline in foreign trade in Nigeria. Based on the findings of this study, the study recommends that the government should employ a contractionary monetary policy to fight inflation by reducing the money supply in the country through decreased bond price. inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria. The government should intervene in the foreign exchange market in order to build reserves for themselves or provide them to the bank to help stabilize the exchange rate. The government should strive to improve trade performance in the short and long run. They should also reduce government spending and tax capital inflow. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Monetary Policy and Trade Balance in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45080.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45080/monetary-policy-and-trade-balance-in-nigeria/edokobi-tonna-david
Effect of Monetary Policy on Economic Growth in Nigeriaijtsrd
"The chequered history of the Nigeria monetary policy has created a visible asymmetry in the two known monetary regimes before and after SAP in the country. Years after the Structural Adjustment Programme SAP , the Nigeria economy grew to become the strongest economy in Africa and suddenly plunging into recession, a situation that have adversely affected the growth and development of the economy by ways of rising unemployment rate, soaring poverty and swollen external debt, thus suggesting that the failure of the monetary policy in curbing price instability has caused growth instability as Nigeria's record of growth and development has become very poor. This study therefore examines the effect of monetary policy on economic growth in Nigeria using secondary data covering the period of 1980 2017 that were sourced from the Central Bank of Nigeria statistical bulletin. The model's estimates were estimated via multiple econometric model of the ordinary least square to ascertain the effect of money supply, credit in the economy, interest rate on credit, infrastructure, inflationary rate, external debts, price index on growth in Nigeria. The results show that money supply, interest rate on credit, infrastructure and external debt were statistically significant in explaining its impacts on economic growth while other variables used in the study were all found to be statistically insignificant in explaining the growth rate of the Nigerian economy. The study recommends among others that for effective operation of the monetary policy measures in the Nigerian economy, the Central Bank of Nigeria should be granted full autonomy on its monetary policy functions. Partial autonomy should be replaced with full autonomy for the central banks in the developing economies at large which is invariably subjected to government interference and its politics. Onwuteaka, Ifeoma Cecilia | Okoye, P. V. C | Molokwu, Ifeoma Mirian ""Effect of Monetary Policy on Economic Growth in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd22984.pdf
Paper URL: https://www.ijtsrd.com/humanities-and-the-arts/economics/22984/effect-of-monetary-policy-on-economic-growth-in-nigeria/onwuteaka-ifeoma-cecilia"
Analyzing the Effect of Government Expenditure on Inflation Rate in Nigeria 1...ijtsrd
Nigeria is a developing economy with active participation of the federal government in various economic sectors not only to promote economic growth and development but also to instill fiscal and economic discipline in the economy. Government participation in the economy means greater funding of economic activities and this is expected to impact on economic indicators. This study analyses the effect of government expenditure on inflation rate in Nigeria within a period of 39 years spanning 1981 2019 . The study specifically seek to ascertain, determine, explore and assess the extent to which government expenditures on key sectors of agriculture, education, health and telecommunications respectively affect inflation rate in Nigeria. In line with the specific objectives of this study, four research questions are raised and four hypotheses duly formulated. Data used for this study were collected from the Central Bank of Nigeria CBN Statistical Bulletin. Government Expenditure on Agriculture GOA , Government Expenditure on Education GOE , Government Expenditure on Health GOH and Government Expenditure on Telecommunication GOT are the independent variables while inflation rate INF is the dependent variable. Descriptive statistics, diagnostic test employing the Augmented Dickey Fuller and a multivariate regression based on Johanson Cointegration and Error Correction Model ECM are used to analyze the data. Our findings indicate that government expenditures on education and agriculture have positive but insignificant effect on inflation rate and on the other hand, government expenditure on health and government expenditure on telecommunications have positive and significant effect on inflation rate. Based on our findings, the study recommends that government should increase its allocation to the health and education sectors to trigger increased skills and healthcare of economic operators for enhanced human capital development and economic productivity. Government should also provide adequate infrastructures to facilitate economic growth and reduce high inflation rate. Mbanefo, Patrick Amaechi | Atueyi, Chidi Leonard "Analyzing the Effect of Government Expenditure on Inflation Rate in Nigeria (1981-2019)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-2 , February 2022, URL: https://www.ijtsrd.com/papers/ijtsrd49237.pdf Paper URL: https://www.ijtsrd.com/management/management-development/49237/analyzing-the-effect-of-government-expenditure-on-inflation-rate-in-nigeria-19812019/mbanefo-patrick-amaechi
IMPACT OF FISCAL POLICY AND MONETARY POLICY ON THE ECONOMIC GROWTH OF NIGERIA...AJHSSR Journal
ABSTRACT: This research work focused on the impact of fiscal and monetary policy on Nigeria‟s economic
growth between 1980 and 2016. In the study, variables such as government expenditure and taxation revenue
were used to proxy fiscal policy while the broad money supply was employed as a proxy for monetary policy.
The other variable employed as controlled variable is interest rate. The unit root test confirmed that all the
variables were not stationary at levels but were stationary at first difference. Also, the Johansen cointegration
test confirmed that a long run relationship exists between fiscal policy, monetary policy and economic growth in
Nigeria. The empirical results reported using the ordinary least squares technique suggested that fiscal policy
has positive and significant impact on economic growth, and monetary policy has positive impact on economic
growth as well. We, therefore, conclude that both fiscal and monetary policies have positive and significant
impact on Nigeria‟s economic growth between 1980 and 2016. To this end, we recommend that the Federal
Government of Nigeria should focus on using the fiscal policy instruments to stimulate the economy in the
desired direction in order to sustain economic growth process. We also call on the Central Bank of Nigeria to
consistently embark on appropriate and effective monetary policy to boost the economy. Furthermore, since
interest rate is observed to negatively impact economic growth, efforts should be made as lowering the cost of
borrowing in the commercial banks and other financial institutions in order to boost investment and increase
economic growth in the country.
This study examined the effect interest rate on economic growth in Nigeria. Augmented Dickey – Fuller (ADF), Bound Test and Autoregressive Distributed Lag (ARDL) were employed to examine the effect of impact of interest rate on economic growth in Nigeria. The unit root test showed gross domestic product was 1(0) while interest rate, investment and gross capital formation were 1(1). The result of the Bound Test indicated long run relationship among the macroeconomic variables employed in the study. The result of the ARDL indicated that interest rate had negative effect on economic growth both in short run and long run. However, in the long run investment and gross capital formation were established to have positive effect on economic growth with gross capital formation being insignificant. It was concluded that interest rate has a macroeconomic tool is not effective in stimulating economic growth in Nigeria. It was recommended that the level of interest rate should be adequately controlled for the purpose of stimulating economic growth without inflationary pressure. Finally, robust macroeconomic policies aimed at ensuring economic stability should be formulated in order to increase capital formation and attract investment in order to promote economic growth.
Macroeconomic stability in the DRC: highlighting the role of exchange rate an...IJRTEMJOURNAL
This study is part of a macroeconomic approach and seeks to identify the role of the rate of
economic growth and the exchange rate in controlling the macroeconomic framework. The approaches adopted
in this paper are part of Keynesian thinking on macroeconomic stability using the macroeconomic stability
index proposed by Burnside and Dollars (2004) and A. Amine (2005). Our results argue that economic growth
is causing macroeconomic stability and that the exchange rate is negatively and significantly accounting for
macroeconomic stability in the Democratic Republic of Congo.
Exchange Rate Deregulation and Nigeria’s Industrial Output (1970-2015)AJHSSR Journal
The study examined the effect of exchange rate deregulation on the industrial output of Nigeria
over the period 1970 – 2015. Data for the study comprising Nigeria‟s Industrial Sector‟s Output, Exchange Rate,
Capacity Utilization and Inflation Rate were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin
2015 edition. The data were analyzed using Error Correction Model and Ordinary Least Squares technique. The
result of the analysis revealed that exchange rate deregulation impacted positively and significantly on Industrial
output over the long run period. The dummy variable, which was introduced in the data to segment pre-SAP and
post-SAP periods also showed that exchange rate deregulation was beneficial to the industrial sector. In
conclusion, the study recommended that exchange rate should continue to be deregulated and closely monitored
to discourage rent-seekers and price arbitrage. Also, the government should support export-led growth,
particularly in provision of incentives and soft loans to aid in the export of locally produced industrial outputs.
In addition, government should create a favorable and enabling environment for production such as constant
supply of electricity and good road networks.
Dynamic Impact of Money Supply on Inflation: Evidence from ECOWAS Member Statesiosrjce
According to the monetarists, inflation is essentially a monetary phenomenon in the sense that a
continuous rise in the general price level is due to the rate of expansion in money supply far in excess of the
money actually demanded by economic units. But the link between changes in money supply and inflation is not
instantaneous. This study, therefore, assessed this dynamic linkage between money supply and inflation in
ECOWAS member states; West African Monetary Zone (WAMZ) and West African Economic Monetary Union
(WAEMU) for the period 1980-2012. The stationary properties of the series are explored both at univariate and
panel sense using KPSS and ADF; IPS and LLC. The results revealed that money supply and inflation are
stationary at the level for individual countries and at panel sense. The random effect model for ECOWAS
member states shows that the impact of money supply on inflation is effective in the current and first period.
While the impact is effective in the first period for WAMZ, WAEMU experiences the impact in current period.
The finding also reveals that there are significant specific-country effects on the variables. This implies that the
objective of macroeconomic convergence is yet to be achieved. The paper, therefore recommends that inflation
should be used as an operational guide in evaluating the effectiveness of monetary policy and also a strong
monetary cooperation programme among ECOWAS member states should be evolved.
Adopting Inflation Targeting for Monetary Policy: Practical Issues for Nigeriaiosrjce
IOSR Journal of Humanities and Social Science is a double blind peer reviewed International Journal edited by International Organization of Scientific Research (IOSR).The Journal provides a common forum where all aspects of humanities and social sciences are presented. IOSR-JHSS publishes original papers, review papers, conceptual framework, analytical and simulation models, case studies, empirical research, technical notes etc.
The objective of this study is to identify the determinants of inflation in West Africa, mainly in the WAEMU zone, in order to contribute to improving the conduct of monetary policy. The equation of the exchange of the Quantitative Theory of the Currency and the generalized method of moments (MMG) in dynamic panel is used. Annual data concerning six countries in West Africa and range from 1991 to 2015. The results of the estimation show that in addition to the economic growth rate and the money supply, the devaluation has a significant effect on inflation. As we can see, inflation is not systematically a monetary phenomenon in West Africa. The authorities must therefore seek to determine the optimal threshold for the rate of increase of the money supply.
The Impact of Monetary Policy on Economic Growth and Price Stability in Kenya...iosrjce
The government of Kenya’s economic blueprint dubbed ‘Kenya Vision 2030’ acknowledges the
importance of maintaining a stable macro-economic environment. Despite Kenya implementing monetary
policy aimed at achieving stable prices and fostering economic growth, the economy has been reporting low
economic growth and high rates of inflation. These implies there is still a point of disconnect between what
Central bank of Kenya Pursues and the outcome of the objectives. In this study, structural vector autoregresion
(SVAR) model is estimatedto trace the effects of monetary policy shocks on economic growth and prices in
Kenya. Three alternative monetary policy instruments were put into use i.e. broad money supply (M3), interbank
lending rate (ILR) and the real effective exchange rate (REER). The study found evidence that monetary policy
innovations carried out on the quantity-based nominal anchor (M3) has modest effects on economic growth and
prices with a very fast speed of adjustment. Innovations on the price-based nominal anchors (ILR and REER)
have relative and fleeting effects on real GDP. The study recommended that Central Bank of Kenya should
place more emphasis on the use of the quantity-based nominal anchor rather than the price-based nominal
anchor
Monetary Policy Variables and Agricultural Development in NigeriaAJHSSR Journal
ABSTRACT : The goal of any country's monetary policy is to maximize economic production ; thus, the
monetary authorities of that country use monetary policy variables to regulate the money supply, interest rates,
and other aspects of the money market. From 1999-2017, when the Central Bank of Nigeria (CBN) employed a
wide range of monetary policy variables to stimulate the economy, this study employs the multiple regression
technique to examine the relationship between agricultural output, government spending, money supply, and
inflation rate in Nigeria. This research found that financial policy measures can be used to affect agriculture,
which would have a positive knock-on effect on agricultural development and, ultimately, Nigeria's economic
growth and development. Both tools of monetary policy have the potential to promote agricultural growth with
the right policies in place.
KEYWORDS : Agricultural Output, Government Spending, Inflation Rateand Money Supply.
Comparative Longitudinal Analysis on Global Inflation with a special emphasis...Ram Sharma
https://zenodo.org/record/7939068#.ZGQTS_dX6Ef
This is the presentation for the research “Comparative Longitudinal Analysis on Global Inflation with a special emphasis on Indian Economy” presented at the Second International Conference at the Daly College of Business Management, DAVV Indore.
The research was further published in its peer to peer reviewed conference journal.
The economic fluctuations in Indian housing markets have been time and again proved to be led by inflation (Granger Cause) (Richa Pandey & V. Mary Jessica, 2020).
The purpose of this study is to perform a comparative longitudinal analysis on Global Inflation with a special emphasis on Indian Economy.
The study aims to observe the positive cause-effect relationship between the rise of money supply and circulation in the economy and the succeeding rise in housing prices.
As Gregory Wolfe theorised, “The inflation of our time is intimately connected with some of its most obdurate ideas, forces, postulates, and institutions and can be overcome only by influencing these profound causes and conditions. It is not just a disorder of the monetary system which can be left to financial experts to redress, it is a moral disease, a disorder of society. This inflation, too, belongs to the things which can be understood and remedied only in the area beyond supply and demand.”
Friedman’s permanent income hypothesis suggests that people would change their desired consumption if changes in housing prices affect their expected lifetime wealth. Moreover, an inflationary housing market can be termed essentially, as one of the most major contributors to a nation’s overall inflation (Jared Bernstein, Ernie Tedeschi, and Sarah Robinson, 2021).
A comparative longitudinal analysis on inflation can provide significant insights into the evolution of prices over time. By comparing inflation rates across different countries, researchers can identify patterns and commonalities that can help explain the underlying causes of inflation.
Additionally, by looking at inflation over a long period of time, this research can help economists, administrators and businesses in identifying periods of high and low inflation to investigate the factors that may have contributed to these changes. In general, inflation is defined as a sustained increase in the price level of goods and services in an economy.
Over time, inflation can erode the purchasing power of a currency, as prices for goods and services rise faster than the currency’s value. There are a variety of factors that can contribute to inflation, including increases in the cost of production, changes in monetary policy, and demand-side pressures.
https://zenodo.org/record/7942937#.ZGQQyPdX6Ed
Economic theories speculate that savings generate investment which in turn creates employment opportunities that give birth to demand, prices, profit and more production expansion. This expansion if properly utilized will lead to economic growth of a country. This paper attempts to investigate the causal relationship between domestic savings, domestic investment and economic growth in Nigeria. The study uses annual time series data from 1970-2015. Augmented Dickey-Fuller unit root test, Johansen cointegration, fully modified least squares; Vector error correction model (VECM) and Granger causality test based on Toda-Yamamoto procedure were employed in this study. The results shows that all variables are integrated of order one and hence cointegrated. The study finds domestic investment as having positive and significant impact on economic growth in Nigeria in the long-run. The economic impacts of domestic saving and investment on economic growth in the short-run are found to be low, permanent and long lasting. The VECM model has identified a sizeable speed of adjustment by 68.78% for correcting disequilibrium annually for achieving long term equilibrium steady state position. The Granger causality test result shows statistical evidence of bidirectional causality between domestic investment and economic growth and bidirectional causality between domestic savings and domestic investment in the short-run. However, there is no short-run Granger causality between domestic savings and economic growth. The study recommends that promoting investment for higher economic growth is a better policy strategy for Nigeria. Enhancing investment growth through savings is also a policy option suitable for short-run to long-run as evidenced by this study.
Extant literature revealed that international trade plays a key role to address the economic phenomena and can help to earn foreign exchange. Despite the accruable benefits from international trade and the countrys huge oil export that account for about 90 of its foreign exchange earnings, Nigerias trade balance and exchange rate remain unfavourable. The persistent rise in Nigerias exchange rate and unfavourable trade balance in recent time warrants an empirical probe. This study therefore examines the effect of exchange rate, domestic income, foreign income, consumption expenditure, money supply and interest rate on trade balance using a secondary time series data covering a period of thirty years from 1991 2020. The study employed a regression technique of the Ordinary Least Square OLS . All data used were secondary data obtained from the statistical bulletin of Central Bank of Nigeria CBN and National Bureau of Statistics NBS annual publications. After determining stationarity of the study variables using the ADF Statistic, it was discovered that the variables were all integrated at level, first and second difference, and found out to be stationary at their first difference. The study also using Johansen Cointegration Test, found that there is a long run relationship between the variables. Hence, the implication of this result is that there is a long run relationship between trade balance and other variables used in the model. From the result of the OLS, it is observed that exchange rate, domestic income, foreign income and money supply have a positive and significant impact on trade balance in Nigeria. The study recommends that the government should fixed or peg on the exchange rate through the central bank. This will enable the government to buy and sell its own currency against the currency to which it is pegged. The government should strive to reduce inflation to make exports more competitive. The government should also enhance supply side policies to increase long term competitiveness. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Exchange Rate and Trade Balance Nexus" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45079.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45079/exchange-rate-and-trade-balance-nexus/edokobi-tonna-david
Analyzing the Effect of Government Expenditure on Inflation Rate in Nigeria 1...ijtsrd
Nigeria is a developing economy with active participation of the federal government in various economic sectors not only to promote economic growth and development but also to instill fiscal and economic discipline in the economy. Government participation in the economy means greater funding of economic activities and this is expected to impact on economic indicators. This study analyses the effect of government expenditure on inflation rate in Nigeria within a period of 39 years spanning 1981 2019 . The study specifically seek to ascertain, determine, explore and assess the extent to which government expenditures on key sectors of agriculture, education, health and telecommunications respectively affect inflation rate in Nigeria. In line with the specific objectives of this study, four research questions are raised and four hypotheses duly formulated. Data used for this study were collected from the Central Bank of Nigeria CBN Statistical Bulletin. Government Expenditure on Agriculture GOA , Government Expenditure on Education GOE , Government Expenditure on Health GOH and Government Expenditure on Telecommunication GOT are the independent variables while inflation rate INF is the dependent variable. Descriptive statistics, diagnostic test employing the Augmented Dickey Fuller and a multivariate regression based on Johanson Cointegration and Error Correction Model ECM are used to analyze the data. Our findings indicate that government expenditures on education and agriculture have positive but insignificant effect on inflation rate and on the other hand, government expenditure on health and government expenditure on telecommunications have positive and significant effect on inflation rate. Based on our findings, the study recommends that government should increase its allocation to the health and education sectors to trigger increased skills and healthcare of economic operators for enhanced human capital development and economic productivity. Government should also provide adequate infrastructures to facilitate economic growth and reduce high inflation rate. Mbanefo, Patrick Amaechi | Atueyi, Chidi Leonard "Analyzing the Effect of Government Expenditure on Inflation Rate in Nigeria (1981-2019)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-2 , February 2022, URL: https://www.ijtsrd.com/papers/ijtsrd49237.pdf Paper URL: https://www.ijtsrd.com/management/management-development/49237/analyzing-the-effect-of-government-expenditure-on-inflation-rate-in-nigeria-19812019/mbanefo-patrick-amaechi
IMPACT OF FISCAL POLICY AND MONETARY POLICY ON THE ECONOMIC GROWTH OF NIGERIA...AJHSSR Journal
ABSTRACT: This research work focused on the impact of fiscal and monetary policy on Nigeria‟s economic
growth between 1980 and 2016. In the study, variables such as government expenditure and taxation revenue
were used to proxy fiscal policy while the broad money supply was employed as a proxy for monetary policy.
The other variable employed as controlled variable is interest rate. The unit root test confirmed that all the
variables were not stationary at levels but were stationary at first difference. Also, the Johansen cointegration
test confirmed that a long run relationship exists between fiscal policy, monetary policy and economic growth in
Nigeria. The empirical results reported using the ordinary least squares technique suggested that fiscal policy
has positive and significant impact on economic growth, and monetary policy has positive impact on economic
growth as well. We, therefore, conclude that both fiscal and monetary policies have positive and significant
impact on Nigeria‟s economic growth between 1980 and 2016. To this end, we recommend that the Federal
Government of Nigeria should focus on using the fiscal policy instruments to stimulate the economy in the
desired direction in order to sustain economic growth process. We also call on the Central Bank of Nigeria to
consistently embark on appropriate and effective monetary policy to boost the economy. Furthermore, since
interest rate is observed to negatively impact economic growth, efforts should be made as lowering the cost of
borrowing in the commercial banks and other financial institutions in order to boost investment and increase
economic growth in the country.
This study examined the effect interest rate on economic growth in Nigeria. Augmented Dickey – Fuller (ADF), Bound Test and Autoregressive Distributed Lag (ARDL) were employed to examine the effect of impact of interest rate on economic growth in Nigeria. The unit root test showed gross domestic product was 1(0) while interest rate, investment and gross capital formation were 1(1). The result of the Bound Test indicated long run relationship among the macroeconomic variables employed in the study. The result of the ARDL indicated that interest rate had negative effect on economic growth both in short run and long run. However, in the long run investment and gross capital formation were established to have positive effect on economic growth with gross capital formation being insignificant. It was concluded that interest rate has a macroeconomic tool is not effective in stimulating economic growth in Nigeria. It was recommended that the level of interest rate should be adequately controlled for the purpose of stimulating economic growth without inflationary pressure. Finally, robust macroeconomic policies aimed at ensuring economic stability should be formulated in order to increase capital formation and attract investment in order to promote economic growth.
Macroeconomic stability in the DRC: highlighting the role of exchange rate an...IJRTEMJOURNAL
This study is part of a macroeconomic approach and seeks to identify the role of the rate of
economic growth and the exchange rate in controlling the macroeconomic framework. The approaches adopted
in this paper are part of Keynesian thinking on macroeconomic stability using the macroeconomic stability
index proposed by Burnside and Dollars (2004) and A. Amine (2005). Our results argue that economic growth
is causing macroeconomic stability and that the exchange rate is negatively and significantly accounting for
macroeconomic stability in the Democratic Republic of Congo.
Exchange Rate Deregulation and Nigeria’s Industrial Output (1970-2015)AJHSSR Journal
The study examined the effect of exchange rate deregulation on the industrial output of Nigeria
over the period 1970 – 2015. Data for the study comprising Nigeria‟s Industrial Sector‟s Output, Exchange Rate,
Capacity Utilization and Inflation Rate were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin
2015 edition. The data were analyzed using Error Correction Model and Ordinary Least Squares technique. The
result of the analysis revealed that exchange rate deregulation impacted positively and significantly on Industrial
output over the long run period. The dummy variable, which was introduced in the data to segment pre-SAP and
post-SAP periods also showed that exchange rate deregulation was beneficial to the industrial sector. In
conclusion, the study recommended that exchange rate should continue to be deregulated and closely monitored
to discourage rent-seekers and price arbitrage. Also, the government should support export-led growth,
particularly in provision of incentives and soft loans to aid in the export of locally produced industrial outputs.
In addition, government should create a favorable and enabling environment for production such as constant
supply of electricity and good road networks.
Dynamic Impact of Money Supply on Inflation: Evidence from ECOWAS Member Statesiosrjce
According to the monetarists, inflation is essentially a monetary phenomenon in the sense that a
continuous rise in the general price level is due to the rate of expansion in money supply far in excess of the
money actually demanded by economic units. But the link between changes in money supply and inflation is not
instantaneous. This study, therefore, assessed this dynamic linkage between money supply and inflation in
ECOWAS member states; West African Monetary Zone (WAMZ) and West African Economic Monetary Union
(WAEMU) for the period 1980-2012. The stationary properties of the series are explored both at univariate and
panel sense using KPSS and ADF; IPS and LLC. The results revealed that money supply and inflation are
stationary at the level for individual countries and at panel sense. The random effect model for ECOWAS
member states shows that the impact of money supply on inflation is effective in the current and first period.
While the impact is effective in the first period for WAMZ, WAEMU experiences the impact in current period.
The finding also reveals that there are significant specific-country effects on the variables. This implies that the
objective of macroeconomic convergence is yet to be achieved. The paper, therefore recommends that inflation
should be used as an operational guide in evaluating the effectiveness of monetary policy and also a strong
monetary cooperation programme among ECOWAS member states should be evolved.
Adopting Inflation Targeting for Monetary Policy: Practical Issues for Nigeriaiosrjce
IOSR Journal of Humanities and Social Science is a double blind peer reviewed International Journal edited by International Organization of Scientific Research (IOSR).The Journal provides a common forum where all aspects of humanities and social sciences are presented. IOSR-JHSS publishes original papers, review papers, conceptual framework, analytical and simulation models, case studies, empirical research, technical notes etc.
The objective of this study is to identify the determinants of inflation in West Africa, mainly in the WAEMU zone, in order to contribute to improving the conduct of monetary policy. The equation of the exchange of the Quantitative Theory of the Currency and the generalized method of moments (MMG) in dynamic panel is used. Annual data concerning six countries in West Africa and range from 1991 to 2015. The results of the estimation show that in addition to the economic growth rate and the money supply, the devaluation has a significant effect on inflation. As we can see, inflation is not systematically a monetary phenomenon in West Africa. The authorities must therefore seek to determine the optimal threshold for the rate of increase of the money supply.
The Impact of Monetary Policy on Economic Growth and Price Stability in Kenya...iosrjce
The government of Kenya’s economic blueprint dubbed ‘Kenya Vision 2030’ acknowledges the
importance of maintaining a stable macro-economic environment. Despite Kenya implementing monetary
policy aimed at achieving stable prices and fostering economic growth, the economy has been reporting low
economic growth and high rates of inflation. These implies there is still a point of disconnect between what
Central bank of Kenya Pursues and the outcome of the objectives. In this study, structural vector autoregresion
(SVAR) model is estimatedto trace the effects of monetary policy shocks on economic growth and prices in
Kenya. Three alternative monetary policy instruments were put into use i.e. broad money supply (M3), interbank
lending rate (ILR) and the real effective exchange rate (REER). The study found evidence that monetary policy
innovations carried out on the quantity-based nominal anchor (M3) has modest effects on economic growth and
prices with a very fast speed of adjustment. Innovations on the price-based nominal anchors (ILR and REER)
have relative and fleeting effects on real GDP. The study recommended that Central Bank of Kenya should
place more emphasis on the use of the quantity-based nominal anchor rather than the price-based nominal
anchor
Monetary Policy Variables and Agricultural Development in NigeriaAJHSSR Journal
ABSTRACT : The goal of any country's monetary policy is to maximize economic production ; thus, the
monetary authorities of that country use monetary policy variables to regulate the money supply, interest rates,
and other aspects of the money market. From 1999-2017, when the Central Bank of Nigeria (CBN) employed a
wide range of monetary policy variables to stimulate the economy, this study employs the multiple regression
technique to examine the relationship between agricultural output, government spending, money supply, and
inflation rate in Nigeria. This research found that financial policy measures can be used to affect agriculture,
which would have a positive knock-on effect on agricultural development and, ultimately, Nigeria's economic
growth and development. Both tools of monetary policy have the potential to promote agricultural growth with
the right policies in place.
KEYWORDS : Agricultural Output, Government Spending, Inflation Rateand Money Supply.
Comparative Longitudinal Analysis on Global Inflation with a special emphasis...Ram Sharma
https://zenodo.org/record/7939068#.ZGQTS_dX6Ef
This is the presentation for the research “Comparative Longitudinal Analysis on Global Inflation with a special emphasis on Indian Economy” presented at the Second International Conference at the Daly College of Business Management, DAVV Indore.
The research was further published in its peer to peer reviewed conference journal.
The economic fluctuations in Indian housing markets have been time and again proved to be led by inflation (Granger Cause) (Richa Pandey & V. Mary Jessica, 2020).
The purpose of this study is to perform a comparative longitudinal analysis on Global Inflation with a special emphasis on Indian Economy.
The study aims to observe the positive cause-effect relationship between the rise of money supply and circulation in the economy and the succeeding rise in housing prices.
As Gregory Wolfe theorised, “The inflation of our time is intimately connected with some of its most obdurate ideas, forces, postulates, and institutions and can be overcome only by influencing these profound causes and conditions. It is not just a disorder of the monetary system which can be left to financial experts to redress, it is a moral disease, a disorder of society. This inflation, too, belongs to the things which can be understood and remedied only in the area beyond supply and demand.”
Friedman’s permanent income hypothesis suggests that people would change their desired consumption if changes in housing prices affect their expected lifetime wealth. Moreover, an inflationary housing market can be termed essentially, as one of the most major contributors to a nation’s overall inflation (Jared Bernstein, Ernie Tedeschi, and Sarah Robinson, 2021).
A comparative longitudinal analysis on inflation can provide significant insights into the evolution of prices over time. By comparing inflation rates across different countries, researchers can identify patterns and commonalities that can help explain the underlying causes of inflation.
Additionally, by looking at inflation over a long period of time, this research can help economists, administrators and businesses in identifying periods of high and low inflation to investigate the factors that may have contributed to these changes. In general, inflation is defined as a sustained increase in the price level of goods and services in an economy.
Over time, inflation can erode the purchasing power of a currency, as prices for goods and services rise faster than the currency’s value. There are a variety of factors that can contribute to inflation, including increases in the cost of production, changes in monetary policy, and demand-side pressures.
https://zenodo.org/record/7942937#.ZGQQyPdX6Ed
Economic theories speculate that savings generate investment which in turn creates employment opportunities that give birth to demand, prices, profit and more production expansion. This expansion if properly utilized will lead to economic growth of a country. This paper attempts to investigate the causal relationship between domestic savings, domestic investment and economic growth in Nigeria. The study uses annual time series data from 1970-2015. Augmented Dickey-Fuller unit root test, Johansen cointegration, fully modified least squares; Vector error correction model (VECM) and Granger causality test based on Toda-Yamamoto procedure were employed in this study. The results shows that all variables are integrated of order one and hence cointegrated. The study finds domestic investment as having positive and significant impact on economic growth in Nigeria in the long-run. The economic impacts of domestic saving and investment on economic growth in the short-run are found to be low, permanent and long lasting. The VECM model has identified a sizeable speed of adjustment by 68.78% for correcting disequilibrium annually for achieving long term equilibrium steady state position. The Granger causality test result shows statistical evidence of bidirectional causality between domestic investment and economic growth and bidirectional causality between domestic savings and domestic investment in the short-run. However, there is no short-run Granger causality between domestic savings and economic growth. The study recommends that promoting investment for higher economic growth is a better policy strategy for Nigeria. Enhancing investment growth through savings is also a policy option suitable for short-run to long-run as evidenced by this study.
Extant literature revealed that international trade plays a key role to address the economic phenomena and can help to earn foreign exchange. Despite the accruable benefits from international trade and the countrys huge oil export that account for about 90 of its foreign exchange earnings, Nigerias trade balance and exchange rate remain unfavourable. The persistent rise in Nigerias exchange rate and unfavourable trade balance in recent time warrants an empirical probe. This study therefore examines the effect of exchange rate, domestic income, foreign income, consumption expenditure, money supply and interest rate on trade balance using a secondary time series data covering a period of thirty years from 1991 2020. The study employed a regression technique of the Ordinary Least Square OLS . All data used were secondary data obtained from the statistical bulletin of Central Bank of Nigeria CBN and National Bureau of Statistics NBS annual publications. After determining stationarity of the study variables using the ADF Statistic, it was discovered that the variables were all integrated at level, first and second difference, and found out to be stationary at their first difference. The study also using Johansen Cointegration Test, found that there is a long run relationship between the variables. Hence, the implication of this result is that there is a long run relationship between trade balance and other variables used in the model. From the result of the OLS, it is observed that exchange rate, domestic income, foreign income and money supply have a positive and significant impact on trade balance in Nigeria. The study recommends that the government should fixed or peg on the exchange rate through the central bank. This will enable the government to buy and sell its own currency against the currency to which it is pegged. The government should strive to reduce inflation to make exports more competitive. The government should also enhance supply side policies to increase long term competitiveness. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Exchange Rate and Trade Balance Nexus" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45079.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45079/exchange-rate-and-trade-balance-nexus/edokobi-tonna-david
Similar to Economic Impact of Some Determinant Factors of Nigerian Inflation Rate (20)
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
2. Mohammed Anono Zubair et al. 2 of 22
Since the mid-1960s, inflation has become so serious and contentions a problem in
Nigeria. Though the inflation rate is not new in Nigerian economic history, the recent
rates of inflation have been a cause of great concern to many. The continued
overvaluation of the naira in 1980, even after the collapse of the oil boom engendered
significant economic distortions in production and consumption as there was a high rate
of dependence on imports which led to a balance of payment deficits. This resulted in
taking loans to finance such deficits. An example was the Paris Club loan, which was a
mere Five Billion, Thirty-nine million dollars ($5.39billion) in 1983 rose to twenty-one
billion, six million dollars ($21.6billion) in 1999 (Metwally and Al-Sowaidi, 2004)[2].
Inflation harms the economy as a whole. In Nigeria, some of the macroeconomic
variables determining inflation are the real Gross Domestic Product (GDP), exchange rate,
government expenditure, money supply, interest rates, current account deficits, public
debt, trade volume, foreign reserves, money supply and balance of trade, amongst other
factors. The adoption of the Structural Adjustment Programme (SAP) in 1986 saw a
temporal reduction in fiscal deficits and subsidies in the economy. But as the effects of the
policy gathered momentum, there was a fall in the growth rate of Gross Domestic
Product (GDP) in 1990 from 8.3% to 1.2% in 1994, with inflation rising from 7.5% in 1990
to 57.0% in 1994 respectively. In 1995, the inflation rate rose to 72.8% due to the increased
lending rate, the policy of guided deregulation and the lagged impact of fiscal
indiscipline. In addition to her contemporary fiscal and monetary policies, the Nigerian
government had implemented various other policies aimed at curbing inflation in the
country. One of such policies was the price policy (price control) in 1971 meant to control
the soaring prices of essential goods but was abolished in 1980 for its ineffectiveness
resulting from the severe shortages witnessed during the oil glut in Nigeria (Udu,
1989)[3]. Programmes in the Agricultural sector like the “Operation Feed the Nation” and
the “Green Revolution” were implemented to boost output to reduce prices of food items
but yielded minimal results. Notwithstanding the various efforts of the Nigerian
government to curb the inflationary trend, inflation continued to cause a setback in the
growth rate of the living standard of most Nigerians who are fixed income earners or
unemployed (Agba, 1994)[4].
2. Literature Review
In literature, the search for the influence of inflation indicators on the inflation rate is
studied to discover better results. (Pinto, 1990)[5] recognized the determinants of equal
market premium as interest for homegrown cash, the pace of expansion different terms
of exchange and contended that swelling rises because the depreciation associated with
the unification of both the authority and equal trade rates disposes of incomes from
sending out the profit. (Canetti and Greene, 1991)[6] estimated the impact of financial
development and conversion scale changes on winning and anticipated paces of swelling.
The examination region incorporates the Gambia, Ghana, Kenya, Nigeria, Sierra Leone,
Somalia, Tanzania, Uganda, Zaire, and Zambia. The embraced apparatus of examination
was the Vector Auto Regression (VAR) procedure. The discoveries of the investigation
show that money related elements overwhelm swelling levels in four nations, yet in three
different nations, conversion scale devaluation controls expansion. (Egwakhide, 1994)[7]
in looking at conversion scale devaluation and expansion in Nigeria found that
deterioration of the swapping scale applies up swelling pressure yet it takes a base time
of one year before this is thought about value expansion. Acknowledgement of this
outcome suggests acknowledgement of the way that the country's swelling is brought
about by both financial and underlying variables. (Iyabode, 1999)[8] fostered a two-stage
least square model to assess the inflationary pattern in Nigeria during the period 1971 to
1995. The examination utilized a fractional balance model dependent on miniature
establishments to tackle value levels. The outcomes affirmed the significance of equal
market swapping scale elements. (Odusola and Akinlo, 2001)[9] utilized unhindered
3. Mohammed Anono Zubair et al. 3 of 22
VAR strategy and motivation reaction to analyze an investigation on yield, swelling and
swapping scale in Nigeria. Proof from motivation reaction capacities and underlying
VAR models showed a negative impact of expansion on the yield. Yet, yield and equal
conversion standards were discovered to be the significant determinants of expansion
elements in Nigeria. (Busari, 2007)[10] utilized among different measures, the Hodrick
and Prescott channel. After disintegrating expansion into patterns of repetitive,
occasional, and, arbitrary segments, the examination received the general-to-explicit
displaying the way to deal with research the principle determinants of every segment of
swelling. The outcomes affirmed that over the long haul, expansion is to a great extent
and decidedly identified with the degree of (thin) cash supply and, imperceptibly, to
financial deficiency. In the medium term, expansion was seen to be emphatically
identified with conversion scale devaluation and the development of the cash supply. In
the short run, it was seen that swelling was emphatically identified with development in
cash supply and conversion scale devaluation while it was adversely identified with
development in genuine GDP. (Odusanya and Atanda, 2010)[11] fundamentally
analyzed the dynamic and concurrent connection among expansion and its determinants
in Nigeria from 1970 to 2007. The Augmented Engle-Granger (AEG), co-reconciliation
test and mistake revision model were utilized. The assessed result demonstrates
significant advantages gathered while moving from a high or moderate rate to a low
degree of expansion. (Bakare, 2011)[12] analyzed the determinants of cash supply
development and its suggestions on expansion in Nigeria. The investigation utilized a
semi test research configuration approach for the information examination. The plan
consolidated hypothetical thought (deduced measures) with exact perceptions and
concentrate the greatest data from the accessible information. The assessed relapse result
uncovered a positive connection between cash supply development and swelling in
Nigeria. (Imimole and Enoma, 2011)[13] explored the effect of swapping scale
deterioration on swelling in Nigeria. Utilizing auto relapse appropriated slack (ARDL)
and co-coordination methodology. Proof from the gauge results recommends that
swapping scale devaluation, cash supply and genuine total national output were the
primary determinants of expansion in Nigeria. (Alexander et al., 2012)[14] explored the
primary determinants of expansion in Nigeria for the period 1986 – 2011. The
Augmented Dickey-Fuller unit root insights test uncovered that every one of the factors
is fixed after the first and second contrast at a 5% degree of importance. The co-joining
result uncovers a since quite a while ago run balance connection between the pace of
swelling and its determinants. The Granger causality test uncovered proof of a criticism
connection among expansion and its determinants. The assessed VAR result showed that
monetary shortages, conversion scale, import of labour and products, cash supply and
rural yield impact the expansion rate in Nigeria. (Sani et al., 2016)[15] analyzed the
elements of the inflationary cycle in Nigeria over the period 1981–2015, utilizing the
limits testing a way to deal with co-incorporation. Experimental outcomes demonstrated
that expansion in Nigeria intermediaries by CPI showed a solid level of inactivity. The
econometric outcomes showed that previous swelling and normal precipitation seemed
to have been the primary determinants of the inflationary interaction in Nigeria over the
examination time frame.
The study aimed at building a statistical model for Nigerian Inflation and its
determinants. It shall also identify the determinants responsible for the high inflation rate
in the country and carry out a granger causality test to ascertain whether there exist
bi-directional, uni-directional or no direction between the explanatory variables.
3. Materials and Methods
3.1. Source of Data
4. Mohammed Anono Zubair et al. 4 of 22
The data used in this study are collected from the 2019 National Bureau of Statistics
and Central Bank of Nigeria Statistical Bulletin. The data are collected from the period
1983 to 2020 for inflation rate, Consumer Price Index (CPI), interest rate, money supply,
real income, real Gross Domestic Products (GDP), Foreign Exchange (FOREX) reserve,
exchange rate, total imports and total export.
3.2. Model Specification
The study shall utilize nine explanatory variables, namely; CPI, interest rate, money
supply, real income, real GDP, FOREX reserve, exchange rate, total imports and total
export
𝑌𝑖 = 𝑏0 + 𝑏1𝑥1 + 𝑏2𝑥2 + 𝑏3𝑥3 + 𝑏4𝑥4 + 𝑏5𝑥5 + 𝑏6𝑥6 + 𝑏7𝑥7 + 𝑏8𝑥8 + 𝑏9𝑥9 + 𝜀𝑖
Where:
𝑌𝑖 = Inflation Rate
𝑥1 = CPI
𝑥2 = Interest Rate
𝑥3 = Money Supply (M2)
𝑥4= Real Income
𝑥5 = Real GDP (Gross Domestic Product)
𝑥6 = Forex Reserve
𝑥7= Exchange Rate
𝑥8 = Total Imports
𝑥9 = Total Exports
𝜀𝑖 = disturbance Term
3.3. Ordinary Least Square Regression Model
Regression analysis is widely used to test for the impact, influence or effect of one or
more explanatory variables on the response variable. In restricted circumstances,
regression analysis can be used to infer causal relationships between the independent
and dependent variables. However, this can lead to illusions or false relationships, so
caution is advisable. It is also used for prediction and forecasting (Farrar, et al., 1967)[16].
For regression equation to be efficient, some assumptions are made about the stochastic
error term. These assumptions are given below as follows:
3.3.1. Assumptions of Regression Analysis
1. The error is a random variable with a mean of zero conditional on the explanatory
variables.
2. The independent variables are measured with no error. (If this is not so, modelling
may be done instead of using errors-in-variables model techniques).
3. The independent variables (predictors) are linearly independent, i.e. it is not
possible to express any predictor as a linear combination of the others.
4. The errors are uncorrelated, that is, the variance-covariance matrix of the errors is
diagonal and each non-zero element is the variance of the error.
5. Mohammed Anono Zubair et al. 5 of 22
5. The variance of the error is constant across observations (homoskedasticity). If not,
weighted least squares or other methods might instead be used.
4. Results and Discussion
4.1. Preliminary Test for Regression assumption
4.1.1. Test for Stationarity
This section of this research contains the test for stationarity for all variables
involved. The time plot for all the variables is presented to examine the trend of the
variables and subsequently, to check if the series is stationary and also differencing the
series when found not stationary. The formal test was also conducted to corroborate the
graphical analyses already displayed. The results are summarized in Figures 1 to 9 and
Table 1.
From the result above, Figure 1a shows that Exchange Rate is non-stationary at the
level. (The probability statistic also shows not significant with value 0.9426), while Figure
1b shows that Exchange Rate is stationary at 1st difference. The probability statistic also
shows significance with a value of 0.0000.
Table 4.5 produce an absolute value of the test statistic (2.0495) which is less than the
absolute value of the 1% critical value (3.5777), 5% (2.9252) and 10% critical value (2.6007).
Therefore, we do not reject the null hypothesis and conclude that Forex Reserve is
non-stationary at the level. (The probability statistic also shows not significant with value
0.2655), while Table 4.6 shows the absolute value of the test statistic (7.5796) which is
greater than the absolute value of the 1%, 5% and 10% critical values (3.5812, 2.9266 and
2.9014). Therefore, we do not accept the null hypothesis and conclude that Forex Reserve
is stationary at 1st difference. The probability statistic also shows significance with a value
of 0.0000. Figure 2a shows that Forex Reserve at level is non-stationary or has unit root
while Figure 2b indicates that Forex Reserve has no unit root or it’s stationary at First
Difference. Figure 3a shows that the inflation rate is stationary at a level. The probability
statistic also shows significance with a value of 0.0006. Figure 4a show that Interest Rate
is non-stationary at the level. (The probability statistic also shows not significant with
value 0.2655) while Figure 4b shows that Interest Rate met stationary at 1st difference.
The probability statistic also shows significance with a value of 0.0000. Table 4.10
produce an absolute value of the test statistic (1.5703) which is less than the absolute
value of the 1% critical value (3.5812), 5% (2.9266) and 10% critical value (2.6014).
Therefore, we do not reject the null hypothesis and conclude that Money Supply is
non-stationary at level. (The probability statistic also shows not significant with value
0.4894), while Table 4.11 shows the absolute value of the test statistic (14.9873) which is
greater than the absolute value of the 1%, 5% and 10% critical values (3.5812, 2.9266 and
2.9014). Therefore, we do not accept the null hypothesis and conclude that Money Supply
is stationary at 1st difference. The probability statistic also shows significance with a
value of 0.0000.
Figure 5a shows that Money Supply at level is non-stationary or has unit root while
Figure 5b indicates that Money Supply has no unit root or it’s stationary at First
Difference. Figure 6a shows that Real GDP is non-stationary at level. (The probability
statistic also shows not significant with value 0.9587) While Figure 6b shows that Real
GDP met stationary at 1st difference. The probability statistic also shows significance with
a value of 0.0000. Figure 7a shows that Real Income is non-stationary at level. (The
probability statistic also shows not significant with value 0.8576), while Figure 7b shows
that real Income met stationary at 1st difference. The probability statistic also shows
significance with a value of 0.0000. Figure 8a shows that Total Export is non-stationary at
level. (The probability statistic also shows not significant with value 0.2445), while Figure
8b shows that Total Export is stationary at 1st difference. The probability statistic also
6. Mohammed Anono Zubair et al. 6 of 22
shows significance with a value of 0.0000. Figure 9a shows that Total Import is
non-stationary at level. (The probability statistic also shows not significant with value
0.4976), while Figure 9b shows that Total Import met stationary at 1st difference. The
probability statistic also shows significance with a value of 0.0000.
Figure 1. a) Exchange Rate at Level. b) Exchange Rate at 1st Diff.
Figure 2. a) Forex Reserve at Level. b) Forex Reserve at 1st Diff.
7. Mohammed Anono Zubair et al. 7 of 22
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
INF
Figure 3. Inflation Rate at Level.
Figure 4. a) Interest Rate at Level. b) Interest Rate at 1st Diff.
Figure 5. a)Money Supply at Leve. b) Money Supply at 1st Diff.
8. Mohammed Anono Zubair et al. 8 of 22
Figure 6. a) Real GDP at Level. b) Real GDP at 1st Diff.
Figure 7. a) Real Income at Level. b) Real Income at 1st Diff.
Figure 8. a) Total Export at Level. b) Total Export at 1st Diff.
9. Mohammed Anono Zubair et al. 9 of 22
Figure 9. a) Total Import at Level. b) Total Import at 1st Diff.
Table 1. ADF Test for Stationarity Results
S/No Variables Level First Difference
1 CPI Non stationary Stationary
2 Exchange Rate Non stationary Stationary
3 Forex Reserve Non stationary Stationary
4 Inflation Rate Stationary --
5 Interest Rate Non stationary Stationary
6 Money Supply Non stationary Stationary
7 Real GDP Non stationary Stationary
8 Real Income Non stationary Stationary
9 Total Export Non stationary Stationary
10 Total Import Non stationary Stationary
4.1.2. Test for Autocorrelation using Breusch-Godfrey LM Test
The Breush-Godfrey LM test for autocorrelation presented in Table 2 ascertains that
serial correlation is absent in the model with a chi-square probability value of 0.0851
which is greater than (0.05) the level of significance.
Table 2. Breusch-Godfrey Serial Correlation LM Test
F-statistic 1.489895 Prob. F(9,28) 0.2000
Obs*R-squared 15.21951 Prob. Chi-Square(9) 0.0851
4.1.3. Test for Heteroskedasticity
From the chi-square result in Table 3 produce as a result of testing for
heteroskedasticity, we could note that chi-square prob. (0.7133) is greater than 0.5 level of
significance. Therefore, we do not reject the null hypothesis and conclude that the model
is not suffering from heteroskedasticity.
10. Mohammed Anono Zubair et al. 10 of 22
Table 3. Heteroskedasticity Test: Breusch-Pagan-Godfrey
F-statistic 1.060149 Prob. F(9,37) 0.4138
Obs*R-squared 9.63537 Prob. Chi-Square(9) 0.3808
Scaled explained SS 6.26342 Prob. Chi-Square(9) 0.7133
4.1.4. Test for Normality
The null hypothesis is that the residuals are normally distributed. Considering the
chi-squared result of the test for normality presented in Figure 100, we could note that the
probability value 0.7280 is greater than the critical value (0.05). Therefore, we cannot
reject the null hypothesis and conclude that the residuals are normally distributed. Hence,
the OLS used for this study is appropriate.
0
2
4
6
8
10
-0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2 0.3 0.4
Series: Residuals
Sample 1971 2017
Observations 47
Mean -2.76e-17
Median -0.004544
Maximum 0.357728
Minimum -0.402107
Std. Dev. 0.176198
Skewness -0.280460
Kurtosis 3.097807
Jarque-Bera 0.634885
Probability 0.728008
Figure 10. Normality chart
4.2. Correlation Matrix
Table 4 shows that there exist a positive association between CPI and Inflation Rate,
Exchange Rate and CPI, Interest Rate and Exchange Rate, Interest Rate and Forex Reserve,
Money Supply and Inflation Rate, Money Supply and CPI, Money Supply and Exchange
Rate, Money Supply and Forex Reserve, Money Supply and Interest Rate, RGDP and CPI,
RGDP and RGDP and Forex Reserve, RGDP Interest Rate, RGDP and Money Supply,
Real Income and CPI, Real Income and Money Supply, Real Income and RGDP, Export
and CPI, Export and Forex reserve, Export and Interest Rate, Export and Money Supply,
Export and RGDP, Export and Real Income, Import and Inflation Rate, Import and CPI
and between Import and RGDP while the other are negative association. The probability
result in the table shows that there exists a correlation between Interest Rate and
Exchange Rate (0.0064), Money Supply and Forex Reserve (0.0007), RGDP and CPI
(0.0000) and between Export and Money Supply (0.0405) since their probability value is
less than 0.05 level of significance. While the rest are not correlated as their probability
result values are greater than then level of significance (0.05).
4.3. Ordinary Least Square Test
From the Table 5, R-squared = 0.6613, which shows that 66.13% of the total variation
in the inflation rate can be explained by the explanatory variables.
11. Mohammed Anono Zubair et al. 11 of 22
The coefficient column on the table above shows the values by which the inflation
rate was influenced by the independent variable, which could either be positive or
negative. When it’s positive, it means the inflation rate and the variable move in the same
direction and is inversely related when it’s negative. For example: For every unit change
in interest rate, the inflation rate increases by 0.46. A unit change in CPI will increase
inflation by 3.52. If the money supply changes by 1 unit, the inflation rate will decrease by
0.15. A unit change in the exchange rate will decrease inflation by 0.18. The Parameters of
the model was estimated using the student T-test where only the CPI was found to be
statistically significant (P<0.05). The F-test (0.000) shows that the explanatory variables
have a significant effect on the inflation rate. The OLS model is thus given as:
Infl Rate = 0.9395 + 3.5208(CPI) – 0.3792(Ex Rate) – 0.1227(ForexRes) + 0.4619(IntRate)
– 0.1499(MonSup) -0.1898(RGDP)- 0.1125(RInc) +0.1510(Export) – 0.0390(Import).
4.4. Granger Causality Test
The results presented in Table 6 shows unidirectional causality between Exchange
Rate and Inflation Rate, Total Import and Inflation Rate, Money Supply and Forex
Reserve, Total Export and Forex Reserve, Forex Reserve and Total Import, Total Export
and Money Supply, Real Income and Total Import and between Total Import and Total
Export. The result shows bi-directional causality between Real GDP and CPI.
Table 4. Correlation Matrix
Correlation
Probability INF DCPI DEXR DFXR DINT DMS DRGD DRINC DTEX DTIM
INF 1.000000
-----
DCPI 0.004813 1.000000
0.9753 -----
DEXR -0.077659 0.002681 1.000000
0.6163 0.9862 -----
DFXR -0.130590-0.002517-0.052093 1.000000
0.3982 0.9871 0.7370 -----
DINT -0.064768-0.059398 0.404773 0.091443 1.000000
0.6762 0.7017 0.0064 0.5550 -----
DMS 0.129492 0.154988 0.030485 0.492871 0.027568 1.000000
0.4022 0.3151 0.8443 0.0007 0.8590 -----
DRGDP -0.013464 0.894024 -0.072349 0.010990 0.065770 0.121506 1.000000
0.9309 0.0000 0.6407 0.9436 0.6714 0.4320 -----
DRINC -0.090423 0.093333 -0.144019-0.078219-0.109798 0.117517 0.007446 1.000000
0.5594 0.5468 0.3510 0.6138 0.4780 0.4474 0.9617 -----
DTEX -0.026939 0.119024 -0.075054 0.230424 0.016625 0.310056 0.112220 0.088309 1.000000
0.8622 0.4416 0.6282 0.1324 0.9147 0.0405 0.4683 0.5687 -----
12. Mohammed Anono Zubair et al. 12 of 22
DTIM 0.192026 0.048637 -0.211025-0.081541-0.200623-0.080197 0.086226 -0.120872-0.1860221.000000
0.2118 0.7539 0.1691 0.5988 0.1916 0.6048 0.5778 0.4345 0.2267 -----
Table 5. Multiple Regression Analysis Result
Variable Coefficient Std. Error t-Statistic Prob.
D(CPI) 3.520763 0.442415 7.958056 0.0000
D(EXCH_RATE) -0.379229 0.286565 -1.323362 0.1938
D(FOREX_RESV) -0.122695 0.098799 -1.241869 0.2221
D(INT_RATE) 0.461922 0.596983 0.773760 0.4440
D(MON_SUP) -0.149931 0.192123 -0.780394 0.4401
D(REAL_GDP) -0.189808 0.715719 -0.265198 0.7923
D(REAL_INC) -0.112454 0.081207 -1.384780 0.1744
D(TOTAL_EXPORT) 0.151041 0.130040 1.161497 0.2529
D(TOTAL_IMPORTS) -0.039021 0.102182 -0.381878 0.7047
C 0.939510 0.048244 19.47422 0.0000
R-squared 0.661339 Mean dependent var 1.154369
Adjusted R-squared 0.578962 S.D. dependent var 0.302773
S.E. of regression 0.196462 Akaike info criterion -0.230396
Sum squared resid 1.428097 Schwarz criterion 0.163252
Log likelihood 15.41431 Hannan-Quinn criter. -0.082264
F-statistic 8.028209 Durbin-Watson stat 2.688050
Prob(F-statistic) 0.000002
Table 6. Pairwise Granger Causality Test Result
Pairwise Granger Causality Tests
Sample: 1970 2017
Lags: 2
Null Hypothesis: Obs F-Statistic Prob.
DCPI does not Granger Cause INF 42 0.53178 0.5920
INF does not Granger Cause DCPI 0.06534 0.9369
DEXCH_RATE does not Granger Cause INF 45 3.45897 0.0412
INF does not Granger Cause DEXCH_RATE 0.76806 0.4706
DFOREX_RESV does not Granger Cause INF 45 0.32687 0.7231
INF does not Granger Cause DFOREX_RESV 0.11905 0.8881
DINT_RATE does not Granger Cause INF 45 0.61785 0.5442
INF does not Granger Cause DINT_RATE 1.98839 0.1502
DMON_SUP does not Granger Cause INF 45 2.17718 0.1266
13. Mohammed Anono Zubair et al. 13 of 22
INF does not Granger Cause DMON_SUP 0.60910 0.5488
DREAL_GDP does not Granger Cause INF 44 0.93712 0.4004
INF does not Granger Cause DREAL_GDP 0.50579 0.6069
DREAL_INC does not Granger Cause INF 45 1.53824 0.2272
INF does not Granger Cause DREAL_INC 0.21218 0.8097
DTOTAL_EXPORT does not Granger Cause INF 45 0.61868 0.5437
INF does not Granger Cause DTOTAL_EXPORT 1.10495 0.3411
DTOTAL_IMPORTS does not Granger Cause INF 45 4.19421 0.0222
INF does not Granger Cause DTOTAL_IMPORTS 0.12121 0.8862
DEXCH_RATE does not Granger Cause DCPI 42 0.71287 0.4968
DCPI does not Granger Cause DEXCH_RATE 0.03697 0.9637
DFOREX_RESV does not Granger Cause DCPI 42 0.04115 0.9597
DCPI does not Granger Cause DFOREX_RESV 0.27867 0.7584
DINT_RATE does not Granger Cause DCPI 42 1.55147 0.2254
DCPI does not Granger Cause DINT_RATE 0.01021 0.9898
DMON_SUP does not Granger Cause DCPI 42 1.14324 0.3298
DCPI does not Granger Cause DMON_SUP 0.47489 0.6257
DREAL_GDP does not Granger Cause DCPI 42 7.26602 0.0022
DCPI does not Granger Cause DREAL_GDP 13.9845 3.E-05
DREAL_INC does not Granger Cause DCPI 42 0.51471 0.6019
DCPI does not Granger Cause DREAL_INC 0.85610 0.4331
DTOTAL_EXPORT does not Granger Cause DCPI 42 0.17027 0.8441
DCPI does not Granger Cause DTOTAL_EXPORT 1.57192 0.2212
DTOTAL_IMPORTS does not Granger Cause DCPI 42 0.08682 0.9170
DCPI does not Granger Cause DTOTAL_IMPORTS 0.30884 0.7362
DFOREX_RESV does not Granger Cause DEXCH_RATE 45 0.47748 0.6238
DEXCH_RATE does not Granger Cause DFOREX_RESV 0.03400 0.9666
DINT_RATE does not Granger Cause DEXCH_RATE 45 0.05822 0.9435
DEXCH_RATE does not Granger Cause DINT_RATE 2.29453 0.1139
DMON_SUP does not Granger Cause DEXCH_RATE 45 1.13543 0.3314
DEXCH_RATE does not Granger Cause DMON_SUP 0.02636 0.9740
DREAL_GDP does not Granger Cause DEXCH_RATE 43 0.56280 0.5743
DEXCH_RATE does not Granger Cause DREAL_GDP 0.29748 0.7444
DREAL_INC does not Granger Cause DEXCH_RATE 45 0.01070 0.9894
DEXCH_RATE does not Granger Cause DREAL_INC 1.33801 0.2739
14. Mohammed Anono Zubair et al. 14 of 22
DTOTAL_EXPORT does not Granger Cause DEXCH_RATE 45 1.83918 0.1721
DEXCH_RATE does not Granger Cause DTOTAL_EXPORT 0.00374 0.9963
DTOTAL_IMPORTS does not Granger Cause DEXCH_RATE 45 0.03062 0.9699
DEXCH_RATE does not Granger Cause DTOTAL_IMPORTS 1.30185 0.2833
DINT_RATE does not Granger Cause DFOREX_RESV 45 0.63625 0.5345
DFOREX_RESV does not Granger Cause DINT_RATE 0.32947 0.7212
DMON_SUP does not Granger Cause DFOREX_RESV 45 4.46308 0.0178
DFOREX_RESV does not Granger Cause DMON_SUP 0.06667 0.9356
DREAL_GDP does not Granger Cause DFOREX_RESV 43 0.52696 0.5947
DFOREX_RESV does not Granger Cause DREAL_GDP 0.25839 0.7736
DREAL_INC does not Granger Cause DFOREX_RESV 45 0.70704 0.4992
DFOREX_RESV does not Granger Cause DREAL_INC 0.12341 0.8842
DTOTAL_EXPORT does not Granger Cause DFOREX_RESV 45 5.91458 0.0056
DFOREX_RESV does not Granger Cause DTOTAL_EXPORT 2.35553 0.1079
DTOTAL_IMPORTS does not Granger Cause DFOREX_RESV 45 1.16218 0.3231
DFOREX_RESV does not Granger Cause DTOTAL_IMPORTS 3.79317 0.0310
DMON_SUP does not Granger Cause DINT_RATE 45 0.77576 0.4672
DINT_RATE does not Granger Cause DMON_SUP 0.04056 0.9603
DREAL_GDP does not Granger Cause DINT_RATE 43 0.65402 0.5257
DINT_RATE does not Granger Cause DREAL_GDP 0.43787 0.6486
DREAL_INC does not Granger Cause DINT_RATE 45 0.17761 0.8379
DINT_RATE does not Granger Cause DREAL_INC 0.24187 0.7863
DTOTAL_EXPORT does not Granger Cause DINT_RATE 45 0.45872 0.6354
DINT_RATE does not Granger Cause DTOTAL_EXPORT 0.59062 0.5587
DTOTAL_IMPORTS does not Granger Cause DINT_RATE 45 0.32727 0.7228
DINT_RATE does not Granger Cause DTOTAL_IMPORTS 0.12081 0.8865
DREAL_GDP does not Granger Cause DMON_SUP 43 0.02222 0.9780
DMON_SUP does not Granger Cause DREAL_GDP 0.38987 0.6798
DREAL_INC does not Granger Cause DMON_SUP 45 0.85062 0.4347
DMON_SUP does not Granger Cause DREAL_INC 2.08959 0.1370
DTOTAL_EXPORT does not Granger Cause DMON_SUP 45 7.06494 0.0024
DMON_SUP does not Granger Cause DTOTAL_EXPORT 0.60688 0.5500
DTOTAL_IMPORTS does not Granger Cause DMON_SUP 45 1.95612 0.1547
DMON_SUP does not Granger Cause DTOTAL_IMPORTS 1.76321 0.1846
DREAL_INC does not Granger Cause DREAL_GDP 43 0.48779 0.6178
DREAL_GDP does not Granger Cause DREAL_INC 1.02711 0.3678
15. Mohammed Anono Zubair et al. 15 of 22
DTOTAL_EXPORT does not Granger Cause DREAL_GDP 43 0.40501 0.6698
DREAL_GDP does not Granger Cause DTOTAL_EXPORT 1.55264 0.2248
DTOTAL_IMPORTS does not Granger Cause DREAL_GDP 43 0.05941 0.9424
DREAL_GDP does not Granger Cause DTOTAL_IMPORTS 0.27312 0.7625
DTOTAL_EXPORT does not Granger Cause DREAL_INC 45 0.57054 0.5697
DREAL_INC does not Granger Cause DTOTAL_EXPORT 0.34622 0.7095
DTOTAL_IMPORTS does not Granger Cause DREAL_INC 45 0.78441 0.4633
DREAL_INC does not Granger Cause DTOTAL_IMPORTS 6.09581 0.0049
DTOTAL_IMPORTS does not Granger Cause DTOTAL_EXPORT 45 6.90353 0.0027
DTOTAL_EXPORT does not Granger Cause DTOTAL_IMPORTS 0.59969 0.5538
5. Discussion and Conclusion
The purpose of this study is to build a statistical model for Nigerian inflation and its
determinants. The problems of inflation are undoubtedly surmountable if only the
constituted authorities would demonstrate their dexterity in the implementations of the
necessary policies to curb the menace. Since one of the components that are relatively
under the control of the monetary authority in Nigeria is the nominal effective interest
rate, efforts must be made to ensure interest rate stability to stem inflationary tendencies.
Also, the government must put in place measures that will reduce the impact of total
imports on domestic inflation. This can be achieved by reducing the dependence of the
economy on imported goods and find means of appreciating our local products.
Government should reduce the money supply though it has been one-sided as the rich
become richer and the poor becoming poorer which is not fair. Government should also
stimulate the productive capacity of the economy, especially the agricultural sector to
increase the aggregate supply of food products so that prices will come down and
consequently reduce the rate of inflation.
This research work shows that the series does not suffer from serial correlation,
heteroskedasticity and its residuals are normality distributed. It was also discovered that
only the Inflation rate was stationary at level while CPI, Exchange Rate, Forex Reserve,
Interest Rate, Money Supply RGDP, Real Income Export and Import attains stationarity
at the first difference.
The correlation result shows that there exists a correlation between Interest Rate and
Exchange Rate, Money Supply and Forex Reserve, RGDP and CPI and between Export
and Money Supply since their probability value is less than 0.05 level of significance.
While the rest are not correlated as their probability result values are greater than the
level of significance (0.05).
We found out that 66.13% of the total variation in the inflation rate can be explained
by the explanatory variables. It was also observed from the result that CPI, Interest Rate
and Export has a positive relationship with the inflation rate but only CPI has a
significant effect on the inflation rate with a probability value less than 0.05.
The result shows unidirectional causality between Exchange Rate and Inflation Rate,
Total Import and Inflation Rate, Money Supply and Forex Reserve, Total Export and
Forex Reserve, Forex Reserve and Total Import, Total Export and Money Supply, Real
Income and Total Import and between Total Import and Total Export. The result shows
bi-directional causality between Real GDP and CPI.
16. Mohammed Anono Zubair et al. 16 of 22
Based on the findings of the study, it was recommended that interest rates should be
given attention and the government should create policies that will eliminate fluctuations
in the interest rate. The Nigerian Government should improve the local product to meet
international demands to reduce total imports. Lastly, the policy that will check the
money supply in the country and its utilization should be formulated.
Author Contributions: “Conceptualization SOA and MAZ; Methodolody, SOA;
Software, MAZ and KSA; Validation, SOA and KSA; Formal Analysis, KSA;
Investigation, MAZ; Resources, SOA and MAZ; Data Curation, KSA;
Writing-Original Draft Presentation, SOA; Writing-Review and Editing, SOA and
MAZ; Visualization, SOA; Supervision, SOA and MAZ.
All Authors have read and agreed to the published version of the manuscripts”
Funding: This study received no funding from any source.
Conflicts of Interest: The authors declare no conflict of interest
Reference
[1] Abdul, Syed and Qazi, (2008). Political instability and inflation volatility. Public Choice, 135(3), 207-223.
[2] Metwally and Al-Sowaidi, (2004). Inflation, output growth, volatility and causality: Evidence from panel data and the G7
Countries. Economic Letters, 83(2), 185-191.
[3] Udu, & Paesani, P. (1989). Inflation and inflation uncertainty in the Euro Area. European Central Bank Working Paper Series,
No.1229.
[4] Agba M., David (1991). Conditioning Diagnostics: Collinearity and Weak Data in Regression. New York: Wiley. ISBN
978-0-471-52889-0.
[5] Pinto (1990) Modelling Inflation Volatility. CAMA Working Paper, No.68
[6] Canetti and Greene (1991). Regression Analysis by Example (Third ed.). John Wiley and Sons. ISBN 978-0-471-31946-7.
[7] Egwakhide (1994) Political instability and inflation volatility. Public Choice, 135(3), 207-223.
[8] Iyabode, Oyaromade, R. (2008). Modelling the inflation process in Nigeria. AERC Research Paper, 182, 1-37. [9] Odusola and
[9] Akinlo (2001) Exchange rate volatility, inflation uncertainty and foreign direct investment in Nigeria. Botswana Journal of
Economics, 5(7), 14-31.
[10] Busari Abdullahi, I.S., & Ibrahim, A. (2007). Analysis of inflation dynamics in Nigeria (1981 – 2015). CBN Journal of Applied
Statistics, 7 (1b), 255-275
[11] Odusanya, I.A. and Atanda, A.A. (2010). Analysis of Inflation and its Determinants in Nigeria. Pakistan Journal of Social
Science, 7(2), 97-100.
[12] Bakare (2011) A package for R is available: "perturb: Tools for evaluating collinearity". R Project.
[13] Imimole and Enoma (2011), Fiscal policy and inflation volatility. European Central Bank Working Paper Series, 317.
[14] Anfofum Abraham, Alexander et el (2012). A Caution Regarding Rules of Thumb for Variance Inflation Factors".Quality &
Quantity. 41(5): 673–690.doi:10.1007 / s11135 - 006 - 9018 - 6.
[15] Sani Bawa, Ismaila S. Abdullahi and Adamu (2016) Another perspective on the effects of inflation uncertainty. Journal of
Money, Credit and Banking, 36(5), 911- 928.
[16] Farrar, Donald E.; Glauber, Robert R. (1967). "Multicollinearity in Regression Analysis: The Problem Revisited". Review of
Economics and Statistics. 49 (1): 92–107. doi:10.2307/1937887. JSTOR
Appendix
Table 4.1. LoogCPI Unit Root Test at Level
Null Hypothesis: CPI has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -0.965311 0.7578
Test critical values: 1% level -3.581152
17. Mohammed Anono Zubair et al. 17 of 22
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.2. CPI Unit Root Test at First difference
Null Hypothesis: D(CPI) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -6.148955 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.3. Exchange Rate Unit Root Test at Level
Null Hypothesis: EXCH_RATE has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -0.104950 0.9428
Test critical values: 1% level -3.577723
5% level -2.925169
10% level -2.600658
*MacKinnon (1996) one-sided p-values.
Table 4.4. Exchange Rate Unit Root Test at First Difference
Null Hypothesis: D(EXCH_RATE) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -5.568644 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
18. Mohammed Anono Zubair et al. 18 of 22
Table 4.5. Forex Reserve Unit Root Test at Level
Null Hypothesis: FOREX_RESV has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -2.049462 0.2655
Test critical values: 1% level -3.577723
5% level -2.925169
10% level -2.600658
Table 4.6. Forex Reserve Unit Root Test at First Difference
Null Hypothesis: D(FOREX_RESV) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -7.579550 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.7. Inflation Rate Unit Root Test at Level
Null Hypothesis: INF has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -4.578760 0.0006
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.8. Interest Rate Unit Root Test at Level
Null Hypothesis: INT_RATE has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
19. Mohammed Anono Zubair et al. 19 of 22
Augmented Dickey-Fuller test statistic -1.449570 0.5500
Test critical values: 1% level -3.577723
5% level -2.925169
10% level -2.600658
*MacKinnon (1996) one-sided p-values.
Table 4.9. Interest Rate Unit Root Test at First Difference
Null Hypothesis: D(INT_RATE) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -6.275041 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.10. Money Supply Unit Root Test at Level
Null Hypothesis: MON_SUP has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -1.570328 0.4894
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.11. Money Supply Unit Root Test at First Difference
Null Hypothesis: D(MON_SUP) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -14.98732 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
20. Mohammed Anono Zubair et al. 20 of 22
Table 4.12. Real GDP Unit Root Test at Level
Null Hypothesis: REAL_GDP has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic 0.055472 0.9587
Test critical values: 1% level -3.577723
5% level -2.925169
10% level -2.600658
*MacKinnon (1996) one-sided p-values.
Table 4.13. Real GDP Unit Root Test at First Difference
Null Hypothesis: D(REAL_GDP) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -7.854287 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.14. Real Income Unit Root Test at Level
Null Hypothesis: REAL_INC has a unit root
Exogenous: Constant
Lag Length: 2 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -0.612232 0.8576
Test critical values: 1% level -3.584743
5% level -2.928142
10% level -2.602225
*MacKinnon (1996) one-sided p-values.
21. Mohammed Anono Zubair et al. 21 of 22
Table 4.15. Real Income Unit Root Test at First Difference
Null Hypothesis: D(REAL_INC) has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -9.696681 0.0000
Test critical values: 1% level -3.584743
5% level -2.928142
10% level -2.602225
*MacKinnon (1996) one-sided p-values.
Table 4.16. Total Export Unit Root Test at Level
Null Hypothesis: TOTAL_EXPORT has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -2.103003 0.2445
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.17. Total Export Unit Root Test at First Difference
Null Hypothesis: D(TOTAL_EXPORT) has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -6.275325 0.0000
Test critical values: 1% level -3.584743
5% level -2.928142
10% level -2.602225
*MacKinnon (1996) one-sided p-values.
22. Mohammed Anono Zubair et al. 22 of 22
Table 4.18. Total Import Unit Root Test at Level
Null Hypothesis: TOTAL_IMPORTS has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -1.554116 0.4976
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.
Table 4.19. Total Import Unit Root Test at First Difference
Null Hypothesis: D(TOTAL_IMPORTS) has a unit root
Exogenous: Constant
Lag Length: 0 (Automatic - based on AIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -15.64458 0.0000
Test critical values: 1% level -3.581152
5% level -2.926622
10% level -2.601424
*MacKinnon (1996) one-sided p-values.