Abstract - Financial Deepening and Sustained Economic Growth in Nigeria: What Nonlinear Models Reveal

Journal of Reviews on Global Economics

The Effect of Financial Crises on Growth and FDI in some African Countries: A Panel VECM Approach  Pages 1320-1328

Ebere Ume Kalu, Chinwe R. Okoyeuzu, Elizabeth U. Okechukwu and Wilfred Isioma Ukpere


DOI: https://doi.org/10.6000/1929-7092.2019.08.115

Published: 27 December 2019


Abstract: Motivated by the desire to expose a possible nonlinearity and non-proportionality in linking financial deepening and economic growth, we investigated the finance-growth nexus from a linear and nonlinear perspective using dataset from Nigeria for 1981: Q1 to 2017: Q4. Using the Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive distributed Lag (NARDL) models, and it was found that economic growth tends to adjust nonlinearly to financial deepening than it does linearly. This is expected to guide policy makers towards ensuring that the linearity and nonlinearity polarity of the finance-growth nexus are always factored-in while formulating policies relative to driving sustained growth through financial deepening.

Keywords: ARDL, NARDL, Financial Deepening, and Economic Growth.

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