Interaction Between Real And Financial Sectors In Nigeria: A Causality Test

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1 Ieracio Bewee Real Ad Fiacial Secors I Nigeria: A Causaliy Tes Adaramola, Ahoy Olugbega Bakig ad Fiace Deparme Faculy of Maageme Scieces Uiversiy of Ado Ekii, Nigeria. P.M.B gbegaadaramolauad@yahoo.com Owoeye Taiwo Ecoomics Deparme Faculy of Social Scieces, Uiversiy of Ado Ekii, Nigeria. P.M.B owoeyeaye@yahoo.co.uk The research is fiaced by Asia Developme Bak. No A171 Absrac This sudy ivesigaes he ierrelaioship bewee idusrial produciviy ad moey supply as proxies for he real ad fiacial secors by esig for causaliy uder a Vecor Auo-Regressio (VAR) srucure. I he sudy, i was revealed ha Nigeria over he 35-year period bewee 1970 ad 2005 like may oher LDC s has a uidirecioal causaliy ruig from he fiacial secor o he real secor growh. This idicaes ha he coury sill operaes i he shor-ru ad o ake advaage of log-ru chages, such variables as echology ad facor produciviy should o be ake io cogizace. Keywords: Idusrial Produciviy; Moey Supply; Vecor Auo-Regressio; Causaliy. 1.1 Iroducio Nigeria like every oher ecoomy i he world seeks o maximise her macro-ecoomic objecives by iroducig appropriae policies o chael her ecoomy i he pah of growh ad sabiliy. Promie amog he issues of cocer are idusrialisaio ad he bid o ackle iflaio ad hece he corol of moey supply. The idusrial secor has always bee recogized as he mai secor o speed up he rae of developme such ha i Rosow s (1960) heory of ecoomic developme, also kow as he sage heory. He recogised he idusrial secor as he leadig secor o ecoomic developme pah callig i he core secor, o lead he ecoomy o developme i he ake-off sage while ciig Briai s leadig secor i her ake-off period as he coo exile idusry. Thus, he sae of idusrialisaio or developme cosis of havig accumulaed esablished efficie ad ecoomic mechaism for maiaiig ad icreasig large sock of capial per head i he various firms, similarly, he codiio of uderdevelopme is characerised by possessio of 9

2 relaively small sack of various kids of capial (Chee, 1995). Moeary auhoriies o aoher had seek o corol he amou of moey i circulaio ad, hece, moey supply, sice i is exogeously deermied, i is geerally acceped i he quaiy heory of moey ha if here is a icrease i moey supply, he price level would raise, if however some resources were idle he oupu could icrease, as classified io hree caegories: facors ha give rise o produciviy of exisig facors; a icrease i he available sock of facors of produciviy; ad echological chage. I rece years, Nigeria like oher less-developed aios has bee experiecig subsaial slack i he use of her producive poeial such ha oupu/growh had remaied disquieigly low. I order o redress his udesirable sae of affairs, Nigeria has bee ad paricularly uder he Srucural Adjusme Programme (SAP), usig ad emphasisig moeary policy, his is i lie wih he fiacial lieraure made popular by Mackio (1973) ad Shaw (1973), which sugges ha fiacial liberalisaio is wha is eeded o release he fiace ecessary o promoe growh. Uforuaely, he proceedig ecoomic problem persiss ad eve i some cases seemigly worseed. I he ligh of his developme, public cofidece i he abiliy of goverme o maage he ecoomy has waed ad belief i he likelihood of coiuig ecoomic growh weakeed. I effec, quesios are beig raised as o he effeciveess of moeary policies adoped by goverme over hese years. The eed however arises o udersad he direcio of he relaioship bewee fiace ad growh as was highlighed by Parick (1960) whe he posed he quesio, Is i fiacial secor or he real secor ha leads o oher? The deregulaio of he fiacial secor uder he SAP which gave way o liberal ieres raes ad licesig of baks ogeher wih he rece recapialisaio process which lef i is rail he emergece of 25 mega baks ad oher o-bak fiacial isiuios show a belief i he supply leadig hypohesis. Reversal of deregulaio i Jauary 1994 wih reur o wha he goverme called maaged deregulaio, ha is, admiisraively deermied ieres rae ad a hal o liberal bak licesig could sugges a weakeig i earlier belief. Could ha reflec a belief i he demad followig hypohesis? This sudy ieds o use daa for Nigeria ecoomy o esablish he direcio of relaioship bewee idusrial produciviy ad moey supply i Nigeria ad verify previous sudies from oher couries. This paper is cocered wih ivesigaig he ierrelaioship bewee idusrial produciviy ad moey supply usig Nigeria daa ad i is orgaised i his sequece. Wha follows his iroducory secio is he lieraure review, secio hree reviews idusrial produciviy ad moey supply i Nigeria. Secio four discusses he esimaio echiques ad model specificaio while secio five discusses he resul of daa aalysis ad secio six cocludes. 2.1 Lieraure Review I a bid o raise he sadard of livig ad qualiy of life of her people, he primary focus of ecoomic maageme, paricularly i developig couries, becomes effecive ecoomics developme rasformaio. Accordig o Todaro (1971), raisig people s livig levels so much so ha heir icomes ad cosumpio levels of food, medical services, educaio, uiliies ad social services expad hrough releva ecoomic growh process is he focus of ecoomic maageme. I oher words, herefore, o expedie he pace of he process of his aaime, He proposes he eed for goverme o provide for he prevalece of some socio-ecoomic rasformaio codiios which ivolve icreasig people s freedom o choose by elargig he rage of heir choice variables, for example, icreasig he varieies of cosumer goods ad services of reasoable coss. This view presupposes icreased idusrial produciviy which is geerally acceped by ecoomic plaers, researchers, policy makers irrespecive of heir desirable meas of raisig he sadard of livig of he populace. I a supporive mood, Lewis (1967) opied ha i ay ecoomy oe or more secors serve 10

3 as a prime mover, drivig he res of he ecoomy forward. This role of egie of growh or leadig secor has usually bee played by he idusrial secor uder he idusrializaio process. Though small i relaive sizes as compared o GDP, especially i developig couries, oeheless, he idusrial secor is see as poeial leadig secor wih lae resources ad expasios ha could pull u he res of he ecoomy hrough backward ad forward likages. Therefore, i is cosidered as a leadig paradigm grossly because of is dyamism i echological rasmissio ad orgaisaioal simuli. However, he ecoomic regulaory approach uder which idusrialisaio sraegies were adoped i Nigeria up o he mid-1980s did o yield ay remarkable resul he ear oal collapse of he global crude oil prices i he early 1980 s ad he subseque ecoomic crisis ha followed i coupled wih some ieral facors such as ecoomic mismaageme of aural resources, resuled i accumulaio of huge exeral ad ieral debs, chroic budge deficis wih he aeda iflaioary pressures ad resources ecoomic declies i all is ramificaios as well as high uemployme raes. These creaed some rasformaio challeges which promped Nigeria o adop he World Bak/IMF edorsed Srucural Adjusme Programme (SAP) i July 1986, i order o amog several objecives: achieve fiscal ad balace of payme viabiliy; evolve a privae secor-led ecoomic developme process; lesse he domiace of uproducive ivesmes; ad resrucure ad diversify he producive base of he ecoomy (Philips, 1987). Towards hese eds, here was a reversal of Nigeria developme approach from ecoomic regulaio o ecoomic deregulaio ad liberalisaio-relyig o marke forces o allocae available resources. Wihi his ew paradigm are such policies as: adopio of appropriae pricig policies for producs; adopio of measure o simulae producio ad broade he supply base of he ecoomy; deregulaio ad greaer reliace o marke forces; raioalisaio ad privaisaio of public eerprises; sregheig of exisig demad maageme policies; rade ad payme mobilizaio; ariff reform ad raioalisaio o promoe idusrial diversificaio (Philips, 1987). Accordig o Ajakaiye ad Ayodele (2001), i spie of hese elaborae sraegies which would have favoured effecive idusrialisaio process i a ecoomically coducive evirome, mos of he resuls were socio-ecoomically udesirable. This is o ucoeced wih some SAP associaed developme problems such as chroic budge defici, huge exeral deb burde ad serious ecoomic declie. Agais he backgroud of his disappoime, Nigeria s Visio 2010 Repor (1998) aims a creaig a sable macroecoomic evirome ha will provide a coducive amosphere for dyamic, log-erm self-susaiig growh ad developme wihi he susaiable ecoomic developme paradigm as proposed i he 1980 Lagos Pla of Acio. Towards his ad ecoomic plaig ad policy isrumes seem o be currely direced a he developme of he key producive secors of he ecoomy such as agriculure, idusry ad paricularly maufacurig ad commerce for he promoio of he pace of idusrialisaio i Nigeria. I his regard, here is a urge eed for policy isrumes o be properly focused o eergisig he pas execued idusrial rasformaio process i he coury. 3.1 Nigeria i Perspecive Before he discovery of crude oil i commercial quaiy i Nigeria, he coury was grossly depede o he proceeds of agriculural (primary) producs for foreig exchage. However, a idepedece, he goverme saw eed for impor-subsiuio ad hus reduce he level of reliace o he exeral secor for he supplies of maufacured producs ad equipme. I essece, hrough he lure of iceives foreig ivesors were echically ad sraegically ivied o champio Nigeria s idusrialisaio because of he scarciy of ivesible fuds i he coury. The iceives adoped by he goverme were broadly classified io five (5) groups which are: effecive proecio wih impor ariff; expor-promoio of producs produced i Nigeria; fiscal measures of axaio ad ieres raes o make for cheap 11

4 producio coss; foreig currecy faciliy for ieraioal rade; ad he evoluio of developme baks for resource mobilizaio. However, by '72/'73, oil price had a cosise icrease from $2pb o close a $40pb ad crude oil producio o 2.5mpd i 1980 sigifyig a icrease of abou $76millio per day i he aio s capaciy o sped, which of course, gave rise o he decliig emphasises o agriculural secor ad hus, he reducio i her coribuio o oal GDP from 65% i 1960s o 20% i he lae 1970s. I he early 1970s, he maufacurig secor had depeded maily o he exeral secor for foreig exchage o purchase equipme, spare pars ad iermediae ipu ad here was pheomea icrease i he performace of he secor i he mid-1970s ad 1980s occasioed pricipally by he massive iflow of foreig exchage from crude oil sales. However, he ear oal collapse of he ecoomy s drivig force (crude oil prices) which sared i 1981 reversed he pheomea icrease i he performace of he maufacurig secor i Nigeria. As from 1975, he secor wiessed a persise declie due o discovery ad subseque reliace o crude oil. For example, he maufacurig secor grew a 4.8perce i 1960s, his rose o 7.2perce i 1970s bu declied i 1975 ad 1980 o 5.6 ad 5.4perce respecively ad furher rose agai i 1985 a abou 10.5% before i eered io a period of seady declie (Ajakaiye ad Ayodele, 2001). The declie i his performace ca righly accordig o hem be aribued o hree major facors, which are: a weak demad due o he sharp fall i real icome arisig from he ecoomic recessio ad high produc prices; low expor marke producio due o poor qualiy corol ad he high cos of producio due o he high cos of impored ipus; ad he secor s depedece o he exeral secor for he supply of ipus. I rece years, maufacurig as a perceage of GDP has declied o as low as 2% (CBN, 2005). 4.1 Mehod of Aalysis This sudy employs he ecoomeric echique of Co-iegraio ad Vecor Auo Regressio (VAR) which mos aalyss have foud o be very adequae for hadlig ecoomic daa especially for less developed couries LDC s like Nigeria. Core o he values of his aalysis is he examiaio of he variables i he ecoomeric model for saioariy. Basically, he idea is o ascerai he order of iegraio of he variables ad he umber of ime he variables have o be differeiaed o arrive a saioariy. This eables us o avoid he problems of spuriousiy o icosise regressio ha are associaed wih o-saioary ime series models; paricularly, ordiary leas square (OLS) (Egel ad Yoo, 1987). The radiioal ecoomeric mehod oly assumes saioary daa aroud a deermiisic red by icludig a ime red i he regressio equaio. I is however kow ha may ecoomic variables have edecies o red hrough ime, so ha he level of hese variables ca be characerised as o-saioary. The idepede variable cao ac sigificaly o he depede variables idividually bu collecively, he relaioship bewee he depede ad idepede variables acig collecively may be isigifica. This problem is geeraed due o he fac ha he daa has o bee esed o cofirm is saisfacio of he codiio for OLS liss ad eeds o be resolved. The mea variace compued from variable ha have series ha are saioary will be ubiased esimaes of he ukow populaio mea ad variace (Eguwaikhide, 1999). However, ecoomic variables ha are o-saioary series i a regressio equaio would geerae esimaes ha are biased. 4.2 Causaliy (VAR) Sice he objecive of he sudy icludes examiig he direcio of relaio bewee idusrial produciviy idex (Idpx) ad moey supply (Ms). The co-iegraio says ohig abou he direcio of he causal relaioship bewee he wo variables are co-iegraed, i follows ha here mus be causaliy i a leas oe direcio. I his sudy, VAR causaliy es 12

5 was employed o examie he causal likage bewee idusrial produciviy ad moey supply. Grager (1969) es regresses a variable Y. If X is sigifica; i meas ha i explais some of he variace of Y ha is o explaied by lagged values of Y iself. This idicaes ha X is causally prior o Y ad is said o dyamically cause or Grager cause Y cases of uilaeral, bilaeral ad idepede causaliies are explaied i chaper oe of his work ad herefore are o repeaed i his chaper. However, whe wo variables are boh co-iegraed, he joi process as idicaed i Egel ad Grager (1987) ad resaed by Keke, Olomola ad Saibu (2005) ca be wrie i he error-correcio mechaism from give by: Y X b ECM d ECM b AY 1 i1 2 1 i d AY b X d X 1 i1 2 1 i Equaio (4.1) ad (4.2) were used for esig he causaliy bewee he variables of ieres. The ECM erm shows he size of error i he precedig erm. Keke e al (2003) has cauioed agais he exclusio of he ECM erm from equaio 4.1 ad 4.2. He opied ha if he ECM erm is egleced, a impora error is iduced i he empirical aalysis ad he F-es are o loger valid (Keke e al, 2003) Model Specificaio This paper uses Grager causaliy model i which wo variables, Ms ad Idpx are ake o represe moey supply ad idusrial produciviy idex respecively. Le A; =1,2,3, be he se of give iformaio icludig a leas (Ms, Idpx ) he bivariae process of ieres. Also, le A=(A s :s<). Ms ad Idpx are defied similarly, for example, Ms represes all pas values of Ms ad Idpx represes all pas values of Idpx. Grager s defiiio of causal relaioship bewee Ms ad Idpx are as follow: 2 1. Ms causes Idpx if Idpx 2Ms... i A A M s Where (Idpx/Z) represes he miimum predicio error variace of Idpx, give a iformaio period Z, a reducio i he miimum predicio error variace whe pas values of Ms are icluded i he iformaio se o which he predicio of Idpx is codiioed, sigifies Ms causes Idpx. 2. Similarly, for Idpx causes Ms we have: 2 Ms 2Ms ii A A Idpx... Bi-direcioal causaliy (feedback) occurs whe Idpx causes Ms ad Ms causes Idpx. Tha is: 2 3. Ms 2 Ms 2 Idpx ad Idpx 2 Ms Ms... iii A A A A Ms ad Idpx are idepede of oe aoher, if eiher causes he oher, ha is iclusio of values of pas daa se does o reduce he miimum predicio error variace of he oher; hus: 2 4. Idpx 2 Idpx 2 Ms ad Ms 2 Ms Idpx... iv A A A A I addiio, o udergoig he ui roo es for saioary, A=(Idpx, Ms) ad Idpx ad Ms are ake as a pair of liear covariace saioary ime series, hus, he 13

6 Grager causaliy bewee idusrial produciviy (Idpx) ad moey supply (Ms) ca be modeled as follows: Idpx b ECM b Idpx b Ms i1 2 i1 3 Ms d ECM 1 d Idpx 1 d Ms i1 2 i1 3 Where 1 ad 2 are serially ucorrelaed wih zero mea ad fiie covariace marix. The decisio rule for i, ii, iii ad iv will be he es of he ull hypohesis ha he esimaes coefficies are equal o zero a a appropriae level of sigificace; hus: A. Ms causes Idpx if HO 2 :b 3 =0, i=1,2,3, is rejeced B. Idpx causes Ms if HO 1 :d 2 =0, i=1,2,3, is rejeced C. Ms ad Idpx are depede if a ad b above holds D. Ms ad Idpx are idepede if boh a ad b are o rejeced... v vi 5.1 Preseaio ad Aalysis of Resul Beig a ime series daa wih he usual flow of spurious resul, ay successful research o such mus commece o he es for saioariy o he daa. O he recommedaio of Hamilo (1994) ad Hayashi (2000) a saed i Dauda (2005), i was acceped o ivesigae carefully he aure of ay probable o-saioariy, esig each series idividually for ui roo ad he esig for possible co-iegraio amog he series, hus, aalysis of causaliy usig he ypical VAR model is preceded by he ui roo ad co-iegraio es. 5.2 Ui Roo Tes To avoid spurious rejecio or accepace of o causaliy i he resuls, i was ecessary o cofirm saioariy of he variables of ieres as ivesigaed usig he ADF (Augumeed Dickey-Fuller) ess. The resul is preseed i able 1. Table 1: Ui Roo Tes (ADF) Variables (Wih iercep oly) Lag legh Order of iegraio Levels 1 s differece 2 d differece Idpx I (0) Ms I (0) (wih iercep ad red) Level 1 s differece 2 d differece 14

7 Idpx I (1) Ms I (0) Usig iercep oly, Idpx was saioary a 5% criical level o he firs ad secod differece while Ms was o saioary a eiher levels or firs ad secod differecig. However, sice he wo series were reded, he aalysis of ADF usig iercep ad red showed Idpx o be saioary a 5% criical levels o he firs ad secod differecig while Ms was saioary oly afer he secod differece a 5% criical values. Sice he saioary of he variables had bee cofirmed, a simple co-iegraio es was coduced usig he Johase s echique (Johase ad Juselius, 1990). As saed i Dauda (2006), Hamilo (1994) ad Hayashi (2000), argues ha esig ad aalysig co-iegraio i a VAR model is superior o he Egle-Grager simple equaio. 5.2 Johase s Co-iegraio Tes Table 2: Series: Idpx, Ms Lags ierval: 1-4 Eige values Likelihood raio 5% criical value 1% criical value Hypohesised N 0 of CE(S) Noe** A mos 1 (**) deoe projecio of he hypohesis a 5% (1%) sigifica level. L.R. es idicaes oe co-iegraio equaio a 5% sigifica level. The co-iegraio es idicaes oe co-iegraig equaio a 1-4 lags suggesig he exisece of log-ru relaioship bewee moey supply ad idusrial produciviy. The choice of appropriae lag legh for he VAR model plays a criical role i deermiig causaliy, hus, usig he Akaike iformaio crierio (AIC), ad Schwarz iformaio crierio (SIC) he opimal lag legh of e (10) lags was chose. The Grager causaliy equaio was esimaed usig ordiary leas square echique wihi a VAR srucure i E- views versio 3.1. The resuls are preseed below: Table 3: Resul of causaliy ruig from Ms o Idpx Icluded observaio: 26 afer adjusig ed pois Idepede variable Coefficies Sadard error -saisics Idpx (1-)

8 Idpx (2-) Idpx (3-) Idpx (4-) Idpx (5-) Idpx (6-) Idpx (7-) Idpx (8-) Idpx (9-) Idpx (10-) Ms (-1) Ms (-2) Ms (-3) Ms (-4) Ms (-5) Ms (-6) Ms (-7) Ms (-8) Ms (-9) Ms (-10) ECM (-1) R 2 = ; R 2 = ; F-saisic=

9 From aalysig he Idpx regressio, we discovered ha oly he firs o sixh lags of Ms were sigifica judgig by heir respecive sadard error which was less ha half of he coefficie of heir respecive cases. Also, of he six sigifica lagged values, 3 coformed o he apriori expecaios of a posiive relaioship while he secod fourh ad sixh lag period yielded a egaive relaioship which meas a adverse effec of moey supply o idusrial produciviy. The R 2 was 93% ad he adjused R 2 was 64% which shows ha 93% of he variaios i Idpx are explaied by he variables i he model. Correspodigly, he F- saisic ha checks he sigificace of he R 2 was sigifica a 5% level of sigificace. The egaive sig i he ECM shows ha i was currely siged hough o prompig adequae feedback from log-ru red as idicaed by is low value (2%). Table 4: Resul of causaliy Idpx o Ms Icluded observaio: 26 afer adjusig ed pois Idepede variable Coefficies -saisics Idpx (1-) Idpx (2-) Idpx (3-) Idpx (4-) Idpx (5-) Idpx (6-) Idpx (7-) Idpx (8-) Idpx (9-) Idpx (10-) Ms (-1) Ms (-2) Ms (-3) Ms (-4) Ms (-5) Ms (-6)

10 Ms (-7) Ms (-8) Ms (-9) Ms (-10) ECM (-1) R 2 = ; R 2 = ; F-saisic= I he moey supply regressio resul preseed i able 4, however, we see ha oe of he lagged values of Idpx was sigifica judgig by he sadard error es. Though, some of he lagged values coform o apriori expecaio, heir saisical isigificace codem heir relevace i his aalysis. The R 2 ad adjused R 2 surprisigly show a 100% relevace of he variables i he model i explaiig chages i moey supply. The large F-saisic ( ) also reveals he sigificace of he R 2 while he posiively siged ECM shows ha correcio of pas disequilibria is o possible i he model. The gross isigificace i he idividual parameer esimaes ad high sigificace of he F-saisic is cosise wih he submissio of Gujarai who says wih several lags of he same variable, each esimaed coefficie will o be saisically sigifica, possibly because of muli-collieariy. Bu collecively, hey may be sigifica o he basis of sadard F-es (Gujarai, 2004:850). 6.1 Summary ad Cocludig Remarks The sudy has examied he degree of ier-relaioship ad idepedece bewee idusrial produciviy ad moey supply i Nigeria. The empirical aalysis has led o he discovery ha he Nigeria ecoomy shows a ui-direcioal causaliy ha rus from moey supply o idusrial produciviy. This coforms o he quaiy heory of moey ha a icrease i moey supply eiher by mobilizig savigs, icrease i goverme expediure or hrough foreig privae ivesme (FPI), causes a icrease i price level which also lead o a icrease i oupu if here are some idle resources. I also affirms he posulaio of Mackio (1973) ad Shaw (1975) which sugges ha fiacial liberalisaio is wha is eeded o release he fiace ecessary for growh. Expressed i aoher way, Porer (1966) agrees ha developme ad expasio of he fiacial secor precede he demad for is services. This evidece is cosise wih he coclusio of Aigbokha (1995) who saes a causaliy ruig from fiacial o real secor growh (demad followig hypohesis). The imporace of maagig moey supply, ha is, iflaio corol is however show i secio five where wo of he six sigifica lags of moey supply yielded a egaive resul, idicaig a disiceive o idusrial produciviy caused by adverse iflaioary spirals. This is adequaely explaied by he ear hyperiflaioary reds recorded i he coury bewee he lae 70s ad he lae 90s which arose from he oil boom, more recely ermed oil moey. Quesio however arises o he iabiliy of he idusrial secor o yield adequae feedback by simulaeously icreasig moey supply ad hus creaig a circle of perpeual growh i boh he fiacial ad real secors. This slack i idusrial produciviy is see o be caused by a myriad of facors ragig from he iflaioary spiral idicaed by he ear zero coribuio of moey supply o idusrial produciviy as show i able 3. The marke aiude owards home-made goods ad he rampa corrupio i he sysem which has hampered he resuls of he policies which would have brough desired resuls. 18

11 Refereces Aigbokha, B. E. (1995). Fiacial developme ad ecoomic growh: a es of hypohesis o supply leadig ad demad followig fiace, wih evidece i Nigeria. I Nigeria Ecoomic ad Fiacial Review. 1(2) Ajakaiye, D. O. ad Ayodele, A. D. (2005). Idusrial rasformaio effors i Nigeria: some reflecios. Ibada: NISER occasioal paper. 1. Chee, L. N. (1995). The dyamics of produciviy performace i Nigeria maufacurig. I Nigeria Ecoomic ad Fiacial Review. 1(2) Dauda, O. Y. (2006). Dollarisaio ad exchage rae volailiy i Nigeria: explorig causal relaioships. I Joural for Ecoomics ad Social Sudies. 5, Egwaikhide, F. O. (1999). Impor subsiuio idusrialisaio i Nigeria. A seleced review. The Nigeria Joural of Ecoomics ad Social Sudies. 35(1), Egel, R. F. ad Grager, C. W. (1987). Co-iegraio ad error-correcio: represeaio, esimaio ad esig ecoomerics. 55, Egle, R. F. ad Yoo, K. (1987). Spurious regressio i ecoomerics. Joural of Ecoomics. 2, Grager, J. C. W. (1969). Ivesigaig causal relaios by ecoomeric models ad cross special mehods. Ecoomericia, 37(3) Gujarai, D. N. (2004). Basic ecoomerics. New York: McGraw-Hill. Hamilo, J. D. (1994). Time series aalysis. Priceo Uiversiy Press, Priceo, New Jersey, USA. Hayashi, F. (2000). Ecoomerics. Priceo Uiversiy Press, Priceo, New Jersey, USA. Juselius, K. (1990). Maximum likelihood, esimaio ad iferece o co-iegraio wih applicaio o he demad for moey. Oxford Bullei of Ecoomics ad Saisics, 52, Keke, N. A.; Olomola, P. A. ad Saibu, M. O. (2003). Foreig direc ivesme ad ecoomic growh i Nigeria: a causaliy es. I S. A. Olaiya (eds). Joural of Ecoomics ad Social Sudies. 3: Mackio, R. (1973). Moey ad capial i ecoomic developme. Washigo, DC: The Brookly Isiuio. Philip, O. A. (1987). Srucural adjusme programme i a developig ecoomy: he case of Nigeria. Ibada: Nigeria Isiue of Social ad Ecoomic Research (NISER). Rosow, W. W. (1960). The sages of ecoomic growh: a o-commuis maifeso. Lodo: Cambridge Press. Shaw, E. S. (1973). Fiacial deepeig i ecoomic developme. New York: Oxford Uiversiy Press. Todaro, M. P. (1971). Ecoomic developme. 2 d Ediio. Lodo: Pearso Educaio Limied. 19

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