Autoregressive Distributed Lag Approach to External Credit and Economic Growth in Nigeria
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igi global
Abstract
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The need for increasing external credit flows to boost economic activity has exposed Nigeria to the negative effects of
external structural changes. Therefore, an important question of concern in this study is, how does the Nigerian
economy grow when there is a decline in external credit? This study attempted to answer this question by comparing
the flow of external credit to economic activities. This is a distinction from previous studies that had compared stock
of external credit to economic activities. Using annual data covering 36 years for the period 1980-2016, the study
adopted the neoclassical growth model and estimated the model using the Autoregressive Distributed Lag (ARDL)
approach. The study argued that, to the extent that expenditure is credit financed, GDP should be a function of credit
flow, which is new borrowing.
Keywords
H Social Sciences (General), HB Economic Theory, HC Economic History and Conditions