Exploring the Nexus between Trinity Policy Hypothesis and Unemployment in Nigeria a

Motivated by the growing controversy on the effectiveness of the trinity policy goals in driving socio-economic development, this study followed an ex-post facto research design to provide insights into the dynamic effects of trinity policy trade-offs on unemployment in Nigeria. Specifically, the effects of exchange rate stability, monetary autonomy and capital mobility on unemployment were examined. The external reserve is introduced to the empirical model in recognition of its role in stimulating the effectiveness of trinity policy goals. Data for the variables were sourced from the National Bureau of Statistics, CBN Statistical Bulletin and World Bank World Development Indicators (WDI) among others. Descriptive statistics, bounds cointegration and ARDL model form the basis for data analysis. The unit root test results reveal that the variables are mixed integrated. This necessitates the application of the bounds cointegration test. As observed from the results, a long-run relationship exists among the variables. The long-run result revealed that cross-border capital mobility is positively and significantly linked to unemployment, while monetary autonomy was found to exert a significant negative impact on unemployment. Additionally, the external reserve is statistically significant in explaining changes in unemployment. This finding explains why policymakers in Nigeria have continued to prioritize external reserve build-up for sterilized intervention and stimulating policy effectiveness. Owing to the findings, this study recommends that policymakers should allow for financial integration, ensure consistent monetary policy and promote robust external reserve to create opportunities for unemployment reduction.