MACROECONOMIC VARIABLES AND ECONOMIC DEVELOPMENT: THE NIGERIA EXPERIENCE (2007-2021)

Abstract

This paper examined the effect of some macroeconomic variables on economic development of Nigeria. The macroeconomic variables were proxied by inflation, unemployment and real gross domestic product while the economic development was proxied by human development index. The study used ex-post-facto research design. Secondary data was sourced from central bank of Nigeria statistical bulletin. Ordinary Least Square (OLS) method and the Grander Causality test were used to analyses the data. the findings using OLS revealed that Inflation rate and unemployment negatively but insignificantly predicts economic development in Nigeria while Real GDP positively and significantly predicts economic development in Nigeria. The Granger causality tests showed unidirectional causality exists flowing from RGDP and unemployment to HDI in Nigeria, whereas no causality exists between HDI and INFR. Recommendations of the authors from the findings is that the government and monetary authorities should come up with policies that boost real economic productivity in Nigeria, adopt monetary policy measures to reduce inflation to a level that is supportive of economic development in Nigeria and that Government should increase adoption of schemes to improve the rate of unemployment in Nigeria.