The Long-Run Bound Cointegration Influence of Unemployment Rate on the Nigerian Economic Growth

Jamilu Salihu, Ummi Ibrahim Atah and Muhammad Ahmad Usman
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Jamilu Salihu: Department of Banking & Finance, Kano State Polytechnic
Ummi Ibrahim Atah: Department of Economics, Sa’adatu Rimi University of Education, Kumbotso, Kano State.
Muhammad Ahmad Usman: Department of Economics, Sa’adatu Rimi University of Education, Kumbotso, Kano State.

International Journal of Research and Scientific Innovation, 2024, vol. 11, issue 10, 261-271

Abstract: The aim of this paper is to investigate the relative influence of the macroeconomic variables on the Nigerian economic growth for the purpose of sustaining the country’s economic development. The paper focuses on the unemployment rate, inflation rate and exchange rate as independent variables. Gross Domestic Products (GDP) is considered as dependent variable. The study uses the aforementioned dependent and independents macroeconomic variables from the year 2001 to 2022 annual Nigerian data. The study adopts Autoregressive Distributed Lags (ARDL) model to analyze the cointegration and long-run impact of inflation rate, exchange rate and unemployment rate on the GDP for the Nigerian economic growth. The result of the bound cointegration test indicates the palpable cointegration in the model. The study further found that inflation rate has insignificant effect on the economic growth. The unemployment rate has negative impact on the economic growth in the long run. Although the result found that the exchange rate positively influences the economic growth, only the exchange rate lag one that affects the dependent variable in the long run. The implication of the study findings indicate that the acceleration of economic growth could be achieved through measures for solving issues of unemployment rate in the country. Hence, the practical implication of the study is the creation of job opportunity for the sustainability of economic development.

Date: 2024
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