Analysis of the Effect of Macroeconomic Variables on Poverty Incidence in Nigeria (1980-2018)
Abstract
This study explores the relationship between poverty and selected macroeconomic variables, as well as the implication of these macroeconomics variables on poverty level in Nigeria within the period 1988-2018. A total of six variables were employed in this study. They include poverty, inflation, unemployment, exchange rate, government spending, and interest rate. All the six variables were subjected to unit root test, and were found to be stationary at the first difference I (1). Using the Johansen’s co-integration technique, the levels of co-integration of the variables were determined. The variables were found to be co-integrated at 5% level of significance. The short run error correction model was used to determine the short run relationship between poverty and the macroeconomic variables in consideration. The result obtained showed that unemployment, inflation, interest rate, and exchange rate share a positive relationship with poverty, while government spending share a negative relationship with poverty. The study further concludes that all five macroeconomic variables (dependent variables) considered in this study significantly affect the level of poverty in the country, and recommends that government should endeavour to embark on enabling monetary and fiscal policies that would attract foreign investment, and that the government should effect policies that will ensure price stability, and make incentives available to local producers so as to reduce the incidence of inflation in the country.
Key words: Poverty, macroeconomic unit root test, co-integration, inflation
Downloads
Issue
Section
License
Terms and conditions of Creative Commons Attribution 4.0 International License apply to all published manuscripts. This Journal is licensed under a Creative Commons Attribution 4.0 International License. This licence allows authors to use all articles, data sets, graphics and appendices in data mining applications, search engines, web sites, blogs and other platforms by providing appropriate reference. The journal allows the author(s) to hold the copyright without restrictions and will retain publishing rights without restrictions.
A competing interest exists when professional judgment concerning the validity of research is influenced by a secondary interest, such as financial gain. We require that our authors reveal all possible conflicts of interest in their submitted manuscripts.
The Editor reserves the right to shorten and adjust texts. Significant changes in the text will be agreed with the Authors.