The Nexus Between Some Selected Macroeconomic Variables on Growth Output in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach

Macroeconomics remains an evolving science, but the goals of macroeconomic policy are consistent around the world. These include price stability, currency stability, unemployment, the balance of payments, and growth output. This study X-rayed the link between Real Gross Domestic Product (RGDP) which was considered a measure of growth output, Exchange Rate (EXR), Inflation Rate (IFR) and Money Supply (M2) for the current republic in Nigeria. The objectives of the study include: examining the short-run and long-run impact of growth output (RGDP) on EXR, IFR and M2 in Nigeria. A secondary source of data collection was employed for the study. The tools employed for data analysis include the Augmented Dickey-Fuller (ADF) test, Jarque-Bera test, Autoregressive Distributed Lag (ARDL) Co-integration technique, and the error correction parameterization of the ARDL model. The result of the Jarque-Bera test showed that the variables were approximately normally distributed. The findings showed that growth output (RGDP) was cointegrated with EXR, IFR and M2 and the existence of a long-run relationship amongst the variables. The study concludes that while seeking to foster economic growth, Nigerian banks should commit to their mandate of price stability and improve their regulatory framework to ensure a strong financial sector with effective intermediation.