Analysis of the Relationship between External Debt and Economic Growth in Nigeria (original) (raw)

2013

Abstract

This study analyses the relationship between external debt and economic growth in Nigeria, using time series data for the period 1970 - 2009. The study applies a number of econometric techniques such as: unit root test, cointegration test and Granger causality test. Results from this study show that all the variables are stationary at first differenced and integrated of order 1(1) which allows for Johansen cointegration test and the result of the test depicts a long run relationship between real GDP and external debt as well as government expenditure. Thus, the null hypothesis that there is no significant long run relationship is rejected and the alternative is accepted. However, the Granger causality test result showed that, there is no short run relationship between external debt and economic growth in Nigeria. This study concludes that the non-existence of long run relationship between external debt and economic growth in Nigeria indicates that increase in external debt could res...

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