CASUAL NEXUS BETWEEN EXCHANGE RATE AND GROSS DOMESTIC PRODUCT (GDP) ON NIGERIA


Adewinle Funmilayo
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Abstract
This study is to find the causal nexus between exchange rate and GDP on Nigeria. The objectives of this study is to study the trend and growth rates of gross domestic product (GDP) and exchange rate in Nigeria from the year 2010 to the year 2018.and check if there is any causal relationship exists between gross domestic product (GDP) and exchange rate in Nigerian economy for the same period. Empirical works based on time series data assume that the underlying time series is stationary. As a preliminary process, graphs are also used to assess the nature of the data series. Then the time series properties of variables are examined using Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests. The procedure tests a null of no causal relationship as against the alternative of causality. A uni-directional causality is established if GDP causes Exchange rate and not vice versa, while a bi-directional causality is established if causality exist between the two series and runs from GDP to exchange rate and vice versa. From the result above, it indicates acceptance of null hypothesis in both situations and concludes no causal relationship between GDP and exchange rate in Nigeria
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Journal Name :
EPRA International Journal of Economic Growth and Environmental Issues (EGEI)

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Published on : 2021-09-23

Vol : 9
Issue : 9
Month : September
Year : 2021
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