Macroeconomic Volatility, Private Investment, Growth, and Poverty in Nigeria
AbstractAt the time when this paper was written, the latest nationally representative survey implemented in Nigeria dated back to 1996, and the available estimations suggested that two thirds of the population was poor. This high level of poverty was due in large part to macroeconomic volatility that depressed private investment and growth. Using cross-sectional data for 87 countries, we show that real per-capita growth over the period 1980–1994 was a function of productivity growth and investment rates, both of which were negatively effected by volatility (in terms of trade, real exchange rate, and public investments). When comparing Nigeria to high growth nations, we find that most of the growth differential can be attributed to Nigeria’s higher macroeconomic volatility. Simulations suggest that if Nigeria had had lower levels of volatility and better macroeconomic policies, poverty would have been much lower than observed.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11113.
Date of creation: Jan 2007
Date of revision:
Poverty; Volatility; Growth; Investment;
Find related papers by JEL classification:
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
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