Foreign Reserve Changes, Domestic Credit and Output in Nigeria: Any Causality?

Augustine C. Osigwe, Anthony I. Okechukwu and Emmanuel I. Agupusi
Additional contact information
Augustine C. Osigwe: Department of Economics and Development Studies, Federal University, Ndufu-Alike, Ikwo, Nigeria
Anthony I. Okechukwu: Department of Economics and Development Studies, Federal University, Ndufu-Alike, Ikwo, Nigeria
Emmanuel I. Agupusi: Department of Economics and Development Studies, Federal University, Ndufu-Alike, Ikwo, Nigeria

Indian Journal of Commerce and Management Studies, 2017, vol. 08, issue 1, 77-81

Abstract: This study considered the causality that exist among foreign reserve changes, domestic credit and output in Nigeria. There was a robust review of relevant literature. The estimated empirical model of this study leaned on the reviewed literature to mimic the works of Arshad (2008) for Pakistan, Iwedi (2012), Oluitan (2012) for Nigeria. The Granger causality test results indicated that unidirectional causality runs consistently from domestic credit to foreign reserve across the examined lags. This implies that domestic credit causes total reserve and the converse does not exist. The results also revealed that, output Granger causes total domestic credit at lags one and two. The reverse of this unidirectional causality does not hold. At lag three, causality does not exist between the duos. No causality occurred between domestic credit and output across the three lags. On the basis of the empirical findings of this study, the authors recommended that the authorities concerned should have eye on the foreign reserve whenever they intent to tinker the size of the domestic credit. A reasonable size of output should be maintained in readiness for the time(s) when scaling up domestic credit makes economic sense. JEL Classification: B22 C22

Keywords: Foreign reserve; Domestic credit; Output; Granger causality; Nigeria (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://scholarshub.net/index.php/ijcms/article/view/101/95 (application/pdf)
http://scholarshub.net/index.php/ijcms/article/view/101 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aii:ijcmss:v:08:y:2017:i:1:p:77-81

DOI: 10.18843/ijcms/v8i1/12

Access Statistics for this article

Indian Journal of Commerce and Management Studies is currently edited by Dr. Arif Anjum

More articles in Indian Journal of Commerce and Management Studies from Educational Research Multimedia & Publications,India
Bibliographic data for series maintained by Mr. Asif Anjum ().