AN EMPIRICAL ANALYSIS OF FINANCIAL DEEPENING AND ECONOMIC GROWTH IN NIGERIA: (1986 – 2010)
AN EMPIRICAL ANALYSIS OF FINANCIAL DEEPENING AND ECONOMIC GROWTH IN NIGERIA: (1986 – 2010)
No Thumbnail Available
Date
2012-05
Authors
CHUKWUKA, Onyemachi
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
ABSTRACT
Economists have long recognized that the financial system plays a decisive role in the
process of economic development (Stiglitz, 1998), some have argued that financial
intermediaries mobilize, pool and channel domestic savings into productive capital, and by
doing so they contribute to economic growth (supply leading), while others argue, that
financial development is a consequence, and not a cause of economic growth. In this view,
economic growth increases demand for sophisticated financial instruments, which in turn
leads to growth in the financial sector (demand following). This study examines the causal
relationship between financial deepening and economic growth in Nigeria for the period
1986 to 2010 using the Vector Auto Regressive model. From the results of the analysis, we
found out that; financial deepening does not impact or influence economic growth in the
short run. However, in the long run there is a significant effect of financial deepening on
economic growth, lending credence to the supply leading hypothesis that financial deepening
causes economic growth. It was also observed that GDP had a positive and significant
impact on Deposit Money Bank Asset, Money supply and private sector credit, thereby laying
credence to the demand following hypothesis. It was recommended that monetary authorities
should continue with the policy reforms to consolidate the emerging confidence in the
financial system.
Description
A THESIS SUBMITTED TO THE POSTGRADUATE SCHOOL
IN
AHMADU BELLO UNIVERSITY, ZARIA, NIGERIA
IN PARTIAL FULFILMENT FOR THE AWARD OF MASTERS OF SCIENCE IN
ECONOMICS (M.SC)
Keywords
EMPIRICAL ANALYSIS OF FINANCIAL DEEPENING,, ECONOMIC GROWTH,, NIGERIA