Volume : 4, Issue : 1, January - 2015

Investigating the Relationship between Expenditure and Economic Growth in Nigeria: A Two stage Robust Autoregressive Distributed Lag Approach to Cointegration

Adewale F. Lukman, Folorunso A. Serifat, Abiola T. Owolabi

Abstract :

<p>This study examined the relationship between government expenditure and economic growth in Nigeria using annual< /> data from 1970&ndash;2011 collected from the Statistical Bulletin of the Central Bank of Nigeria. The analysis is based on< /> autoregressive distributed lag cointegration (ARDL) bound test approach by Peseran and Shin (2001). ARDL bound test< /> revealed that the variables are cointegrated. The long run estimates revealed that recurrent and capital expenditure have a positive effect on GDP< /> and are significant. The error correction mechanism has a negative sign and is significant.</p>