<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Research background:</bold> The relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However, there seems to be a short-run or long-run relationship among the macroeconomic variables.<bold>Purpose:</bold> This study investigated the long and short run impacts of the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (RGDPPC) (proxy for economic growth).<bold>Research methodology:</bold> This study applied a linear dynamic model Autoregressive Distributed Lag <bold>(</bold>ARDL) modeling technique to analyze the short-run dynamics and long-run relationship of economic growth in Nigeria over the sample period between 1984 and 2017 using annual secondary data extracted from the World Bank Development Indicators Report.<bold>Results:</bold> The empirical results showed that there was a long-run relationship between the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (proxy for economic growth) in Nigeria. The results further revealed that only the unemployment rate had a significant positive impact on real gross domestic product per capita in the long-run and the inflation rate had a significant negative impact on real gross domestic product per capita in the short-run.<bold>Novelty:</bold> Therefore, the study concluded that the unemployment rate and inflation rate proved to have significant impacts on economic growth in the long-run and short-run respectively. The formulation of policies to reduce unemployment through the adoption of a labour concentrated technique of production, entrepreneurship development and policy to keep the inflation rate a single digit.</abstract>

Research background: The relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However, there seems to be a short-run or long-run relationship among the macroeconomic variables.Purpose: This study investigated the long and short run impacts of the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (RGDPPC) (proxy for economic growth).Research methodology: This study applied a linear dynamic model Autoregressive Distributed Lag (ARDL) modeling technique to analyze the short-run dynamics and long-run relationship of economic growth in Nigeria over the sample period between 1984 and 2017 using annual secondary data extracted from the World Bank Development Indicators Report.Results: The empirical results showed that there was a long-run relationship between the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (proxy for economic growth) in Nigeria. The results further revealed that only the unemployment rate had a significant positive impact on real gross domestic product per capita in the long-run and the inflation rate had a significant negative impact on real gross domestic product per capita in the short-run.Novelty: Therefore, the study concluded that the unemployment rate and inflation rate proved to have significant impacts on economic growth in the long-run and short-run respectively. The formulation of policies to reduce unemployment through the adoption of a labour concentrated technique of production, entrepreneurship development and policy to keep the inflation rate a single digit.

Autoregressive Distributed Lag Modeling of the Effects of Some Macroeconomic Variables on Economic Growth in Nigeria

Department of Statistics and NSUK-LISA stat lab

Folia Oeconomica Stetinensia

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Research background: The relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However,...

Autoregressive Distributed Lag Modeling of the Effects of Some Macroeconomic Variables on Economic Growth in Nigeria

Published Online: Jan 29, 2021

Page range: 1 - 19

Received: Oct 12, 2019

Accepted: Oct 11, 2020

DOI: https://doi.org/10.2478/foli-2020-0032

Keywords
ARDL, inflation, interest, long-run, RGDPPC, short-run, unemployment

© 2020 Monday Osagie Adenomon et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Autoregressive Distributed Lag Modeling of the Effects of Some Macroeconomic Variables on Economic Growth in Nigeria

Published Online: Jan 29, 2021

Page range: 1 - 19

Received: Oct 12, 2019

Accepted: Oct 11, 2020

DOI: https://doi.org/10.2478/foli-2020-0032

KeywordsARDL, inflation, interest, long-run, RGDPPC, short-run, unemployment

© 2020 Monday Osagie Adenomon et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
ARDL, inflation, interest, long-run, RGDPPC, short-run, unemployment