Relationship between Monetary Policy and Output Growth in Oil Producing Countries in Africa: Error Correction Model Based On Panel Cointegration Analysis (Published)
This study broadly examined the relationship between monetary policy and output growth in selected oil producing countries in Africa, using time series data spanning from 1980 to 2016. Specifically, the study analyzed the long-run relationship between macroeconomic variables and output growth in selected oil producing countries in Africa. The study confirmed thestationarity of the time series properties of all the variables in the study, using ImPersaran and Shin (IPS) panel unit root test. The study employed Westerlund Error Correction Based Panel Co-integration test to unify the short run and the long run dynamics. Findings from the study showed that there is a long term co-movement between output growth and macroeconomic variables in the selected oil producing African countries. The results from the long – run model of the fixed effect Regression further corroborate the report from the Westerlund Panel Co-integration test where all macroeconomic variables (RINTR, EXR, WOP and USRINTR) have significant long term impact on output growth. Although, the short – term impacts of these macroeconomic variables on output growth are also significant as shown by the short – run model of the fixed effect regression. Based on the findings of this study, it was therefore suggested that the regulatory and supervisory framework for the financial sector should be strengthened in order to improve the effectiveness of monetary policies of the government.
Using annual data from 1980-2014, this paper employs a random effect model to estimate the effect of regional integration on private investment in East African Community (EAC). Levin-Lin-Chu Test (LLC) and Pedroni Cointegration Test were used to investigate the properties of data with respect to unit root and cointegration respectively while the Hausman Test was used to select the random model. The error correction model was used to capture the short-run dynamics in the model. The findings suggest that regional integration (proxied by intra-EAC openness), has a positive significant effect on private investment in the EAC. Hence the respective EAC governments should sustain policies that promote free trade so as to boost private investment in the region through the removal of tariffs which leads to efficiency in production and hence economies of scale.
Unemployment Rate, Gender Inequality and Economic Growth in Nigeria “A Short-Run Impact Analysis” (Published)
This paper examines the short-run impact of gender inequality (proxy by primary and secondary school enrollment) and economic growth (real gross domestic product) on unemployment rate in Nigeria, and also the study determines how much of the forecast error variance of unemployment can be explained by exogenous shocks from variables (gender inequality, economic growth, and population growth rate). Thus, the study using Engel Granger Error Correction Model and Dynamic Stochastic Variance Decomposition Model on a time series data collected from Central Bank of Nigeria Statistical Bulletin. The error correction results in both model 1 and model 2 are robust and consistent with their signs; the impact of gender inequality is positive in both short run models, but significant only in model 1 before the control variables were introduced. Again, the variance decomposition result indicates that gender Inequality emits the highest impulse on the rate of unemployment at 34.735% on average of the ten periods. While economic growth has a negative impact on the rate of unemployment for the two models and exerted only 8.438% impulse on average. The variance decomposition results also showed that unemployment rate transmitted on average of 78.453% impulse on itself for the 10periods under review. Exchange rate, inflation rate, and gross capital formation emitted 28.68%, 10.78%, and 6.81% respectively on average on unemployment rate. Finally, population growth rate transmitted 5.59% impulse on unemployment. There is a long run relationship between the variables and the speed of adjustment towards equilibrium is 52%. Thus, we conclude that gender inequality is a strong factor of unemployment and policy makers and government should embark on developing laws that will reduce/eradicate gender disparity in Nigeria.
Foreign Exchange Management and the Nigerian Economic Growth (1960 – 2012). (Review Completed - Accepted)
The study examined foreign exchange management and the Nigeria economic growth from 1970 to 2012. The scope of the study is limited to Nigeria. The empirical model for the study was based on the conclusion of our theoretical framework. The data used for this study were majorly sourced from the Central Bank of Nigeria Bulletin (2011). The ordinary least square estimation techniques within the error correction model (ECM) framework are employed in the study. The choice of the ECM is to enable it account for the explanatory potent of the regressions in both the short run and long run as well as ascertaining the dynamics of attaining long run equilibrium, an issue which is the key to studies related to macroeconomics variables one of which is the exchange rate. The Johansen-Joselius Co- Integration test is employed in this study, to test for the presence of a long run relationship between the dependent variable (exchange rate) and the independent variables. The result of the co-integration as revealed show that trace statistics and maximum Eigen values are greater than the critical values at 5% level of significance. It shows that there is a unique long run relationship among Y, EXCR, EXPT,IMP, INF and FDI. The result further shows that the explanatory variables explain and account for about 99% of variation in economics growth peroxide by GDP, which is an evidence of a good fit of the model. The f-statistics shows that the explanatory variables are jointly significant in explaining economic growth (dependent variable). The result above shows export and foreign direct investment are statistically significant in determining economic growth which considered at 5% and 10% respectively. However, exchange rate import and inflation are found to be statistically non-significant. It is against this back drop of the above findings, that it is recommended that effort be made to increase the consumption of made in Nigeria goods, which includes the usage of raw material that can be sourced locally by Nigerian industries in order to increase foreign exchange earnings. The implication of this is that local industries should be encouraged to look inward for their raw material. Having uncovered from the study that the nexus between economic growth and foreign exchange management being a short run relationship, it is necessary that the foreign exchange management policy initiatives be made to satisfy the shorts–run behavioral expectations of the variables used in uncovering this fact
This study investigates the effects of public expenditure in education on economic growth in Nigeria over a period from 1977 to 2012, with particular focus on disaggregated and sectoral expenditures analysis. Government expenditures are very crucial instruments for economic growth at the disposal of policy makers in developing countries like Nigeria. The objective of this study is to determine the effect of public expenditure on economic growth in Nigeria using Error Correction Model (ECM). The study used Ex-post facto research design and applied time series econometrics technique to examine the long and short run effects of public expenditure on economic growth in Nigeria. The results indicate that Total Expenditure Education is highly and statistically significant and have positive relationship on economic growth in Nigeria in the long run. The result has an important implication in terms of policy and budget implementation in Nigerian. We conclude that economic growth is clearly impacted by factors both exogenous and endogenous to the public expenditure in Nigeria. It is therefore recommended that, there is need for government to reduce its budgetary allocation to recurrent expenditure on education and place more emphasis on the capital expenditures so as to accelerate economic growth of Nigeria and that Government should direct its expenditure towards the productive sectors like education as it would reduce the cost of doing business as well as raise the standard living of poor ones in the country
Impact of Fiscal Policy on the Manufacturing Sector Output in Nigeria: An Error Correction Analysis (Published)
There has been a growing concern on the role of fiscal policy on the output and input of manufacturing industry in Nigeria, despite the fact that the government had embarked on several policies aimed at improving the growth of Nigerian economy through the contribution of manufacturing industry to the economy and capacity utilization of the sector. The aim of this study is to examine the impact of fiscal policy on the manufacturing sector output in Nigeria. Empirical evidence from the developed and developing economies has shown that fiscal and monetary policies have the capacity to influence the entire economy if it is well managed. An ex-post facto design (quantitative research design) was used to carry out this study. The results of the study indicate that government expenditure significantly affect manufacturing sector output based on the magnitude and the level of significance of the coefficient and p-value and there is a long-run relationship between fiscal policy and manufacturing sector output. The implication of this finding is that if government did not increase public expenditure and its implementation, Nigerian manufacturing sector output will not generate a corresponding increase in the growth of Nigerian economy. It is the recommendation of researcher that the expansionary fiscal policies should be encouraged as they play vital role for the growth of the manufacturing sector output in Nigeria; that fiscal policy should be given more priority attention towards the manufacturing sector by increasing the level of budget implementation, which will enhance aggregate spending in the economy; and consistent government implementation will contribute to the increase performance of manufacturing sector.
In this paper, we employed multivariate econometric analysis approach to study the relationship between taxation and income inequality in Nigeria. The study was a country-specific approach using tax and macroeconomic data from 1980 to 2011. We collected data from the Central Bank of Nigeria Publications, Federal Inland Revenue Service, World Bank and Index Mundi. We estimated the data using a combination of co-integration and error correction model. Preliminary diagnostic analysis using Ramsey RESET test, Breuch-Pagan-Godfrey, Granger causality test and Breuch-Godfrey test of serial correlation were affected to check the accuracy of our model. The preliminary analysis where favourable with no cases of serial correlation, non-normality, bi-directional causality and model misspecification. We found a negative and robust relationship between total tax revenue, total tax revenue to GDP ratio and income inequality in Nigeria with t-values of (-2.748706) and (-2.287270) and negative coefficients of (-0.007869) and (-0.512235) respectively. We found a negative but insignificant relationship between GDPPC, PCREDIT/GDP, TDT/TIT*TTR while LFP and TDT/TIT had positive but insignificant relationship with income inequality with coefficients of (0.421) and (1.243794) and t-values of (1.732565) and (1.717362) respectively.