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High unemployment, volatile exchange rates and hyperinflation contest the steady economy of Ethiopia. The aim of this study is to examine the relationship between inflation, unemployment, exchange rate and economic growth in the steady transition economy of Ethiopia. For this purpose, descriptive and econometric analyses with VAR and Granger causality estimations have been employed by using the annual time series data from 1980 to 2022. The descriptive results show that after 2010, in Ethiopia, stagnant economic growth, extreme volatile exchange rates and hyperinflation were observed. The VAR estimate is consistent with the results of the Granger causality test. It showed that in the long run, economic growth and currency depreciation are directly associated, but unemployment has a negative impact on inflation and economic growth. Economic growth and unemployment have an enlightened impact on the exchange rate devaluation, but they are not ultimately impacted by the rate of inflation. The study implied that between 1980 and 2022, in Ethiopia, there were high rates of unemployment, slow economic growth coupled with hyperinflation and a high exchange rate. The study suggested that boosting industry and agricultural productivity through the adoption of innovation, replacing foreign commodities with domestic commodities and expanding the supply of domestic commodities in international markets can resolve the inspected Ethiopian macroeconomic problems. [ABSTRACT FROM AUTHOR]

The purpose of this article is to evaluate the impact of public investment on economic growth. The data was used from the annual data of the Asian Development Bank (ADB) for 6 countries in ASEAN during 2000-2022. The methodology used in the project is to apply the unit root test to the stationarity properties of individual time series and establish the cointegration relationship between non-stationary variables using methods related to cointegration testing in the long-run. The error correction model (ECM) considers the impact of the variables public investment, public expenditure and budget revenue from taxes on short-term economic growth and long-term growth thereby calculating the adjustment speed and adjustment time of the model and using the Granger causality test with fixed effects for analysis of unbalanced panel data to comprehensively analyze the relationship between public investment and economic growth. Data analysis and processing were performed using Stata software version 17. The findings that public investment has a long-term impact on economic growth and has a two-way causal relationship in all countries. The authors provide policy implications to make public investment more effective contributing to promoting the country's socio-economic development, reviewing and improving the legal system on public investment, restructuring public investment while strongly enhancing the efficiency and quality of public investment, inviting and attracting foreign direct investment (FDI) capital, diversifying capital sources and creating more motivation for the private economic sector to develop and promulgate solutions to develop high-quality human resources. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between financialisation and economic growth in Croatia, focusing on the period from 1995 to 2021. Using time series econometric models, including the Augmented Dickey–Fuller test for stationarity, Johansen's cointegration test for long-term relationships, and the Granger causality test within the Vector Error Correction Model (VECM) framework, the research reveals a sustained long-term equilibrium relationship between financialisation and economic growth in Croatia. However, the Granger causality test does not indicate a definitive causal direction between these variables. While the study is limited to the Croatian context and the specified period, its findings have significant implications for policymakers in Croatia and similar emerging markets. These results suggest that while financialisation can enhance economic growth through better resource allocation and increased investment, it may also pose risks such as financial instability. Such measures aim to mitigate the risks associated with financialisation while promoting sustainable economic growth. To address these challenges, we recommend the implementation of robust regulatory frameworks, financial literacy initiatives, and economic diversification strategies. Such measures aim to mitigate the risks associated with financialisation while promoting sustainable economic growth. The study fills an important research gap on financialisation in emerging markets, particularly in Croatia, providing empirical evidence on the long-term relationship between financialisation and economic growth and highlighting the need for context-specific policy interventions. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the dynamic relationship between economic growth and sustainable development, integrating the Environmental Kuznets Curve (EKC) in 22 Organization of Islamic Cooperation (OIC) member countries across income groups. Design/methodology/approach: Using annual data between 1990 and 2022, the authors apply the cross-correlation coefficient (CCC) approach of Narayan et al. (Economic Modeling, 2016, 53, 388–397) to examine the lead/lag relationship between GDP per capita and sustainable development. This study further validates the findings through a panel Granger causality test and a fixed panel regression model. Findings: This research provides evidence of a U-shaped EKC for only 1 out of 22 (5%) OIC countries. For 13 out of the 22 (59%) OIC countries, increasing income growth is expected to enhance sustainable development in the future. The results show that as income levels rise, there will be a more significant decline in sustainable development for high-income OIC countries in the future than for both middle-income groups, contradicting the EKC hypothesis. The findings from the panel Granger causality and panel regression models also support the CCC results. Originality/value: This study proposes a reverse version of the EKC hypothesis and contributes to the literature on economic growth and environmental sustainability. With increasing economic growth, the results can assist OIC member governments and policy-makers in designing tailored policies and practical measures for future sustainable development. [ABSTRACT FROM AUTHOR]

Purpose: The main purpose of this paper is to analyse the influence of capital efficiency on the economic growth of Bangladesh using the Harrod-Domar (H-D) model. Design/methodology/approach: We use annual data from 1980 to 2019 for this paper. Three steps are taken in the data analysis. First, to check the existence of a unit root, we use the augmented Dickey-Fuller (ADF) test and to determine co-integration among the variables, we use the Johansen-Juselius co-integration test. Next, for long-run estimation, we use the dynamic ordinary least square (DOLS) estimator. The sensitivity of the long-run estimations is further checked by the fully modified OLS (FMOLS) and autoregressive distributed lag (ARDL) estimators. Lastly, we use the Granger causality test to determine the long-run causality among the variables. Findings: The long-run co-integration test validates the co-integrating relationship among the variables. DOLS estimations reveal that the economic growth of Bangladesh is negatively associated with the incremental capital output ratio (ICOR), validating the notion that capital efficiency matters for achieving higher economic growth. On average, an increase in ICOR by a unit tends to reduce economic growth in the long term by 0.75 percent. Our results also reveal no significant relationship between savings and economic growth when the model is extended. Finally, causality results indicate unidirectional causality between ICOR and economic growth. Practical implications - Based on the results obtained, we argue that the enhancement of capital productivity could bring efficiency because ICOR is an inverse of capital productivity. Since Bangladesh's capital productivity is considerably low compared with other neighbouring countries, it is suggested that firms should gradually move towards technological advancement and enhance economies of scale, etc. in the long run. Moreover, policies in favour of continuous skill development programmes could be highly effective in increasing capital productivity given that capital follows a vintage structure. Originality/value: This is the first paper to analyse the economic growth pattern of Bangladesh using the traditional H-D model by incorporating variables such as savings and ICOR and also by relaxing the assumption of time-invariant (i.e. fixed) data of the variables. Moreover, this paper extends the traditional H-D empirical model by introducing key indicators and time breaks for Bangladesh's economy through a stepwise regression process. [ABSTRACT FROM AUTHOR]

This study analyzes the effects of governance on the relationship between research and development expenditure and economic growth in South Africa using annual data from 1997 to 2022 using an autoregressive distributed lag (ARDL) model. The calculated F-tests for the two models in the ARDL bounds testing approach to cointegration revealed a long-run relationship between the series. In the model without a mediating factor, an insignificant impact of research and development (R&D) expenditure on economic growth is reported. However, when R&D interacted with governance, a positive and significant impact was observed. This implies that for R&D to have a positive impact on economic growth, there is a need for strong and quality governance to provide a conducive productive environment. Furthermore, given the ambiguous relationship between governance and economic growth, the Granger causality test results showed that governance granger-causes economic growth and not the other way round. The findings presented in this paper are expected to provide some useful insights for policymakers in South Africa and the African continent. The findings demonstrate the important role that governance plays in enhancing the developmental performance of critical macro-economic growth factors. The study potentially generates new dimensions (by including governance as a mediating factor) in the understanding of how the impact of R&D and other macroeconomic parameters on economic growth can be promoted. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Disciplines Economics & Administrative Scienves Studies is the property of International Journal of Disciplines in Economics & Administrative Sciences Studies and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study explores the relationship between income inequality, economic growth, and unemployment in Greece from 2003 to 2020, encompassing key economic phases: pre-crisis, crisis, memoranda, and post-memoranda. The aim is to analyze how economic growth (logarithm of GDP-LOGGDP) and unemployment influenced income inequality (GINI coefficient) during periods of economic turmoil and recovery. Using linear regression analysis on 18 years of annual data, this study identifies significant relationships between the variables, with diagnostic tests confirming model robustness. The findings reveal a strong positive and statistically significant relationship between LOGGDP and income inequality, indicating that economic growth, without effective redistributive mechanisms, exacerbated disparities. Unemployment had an even stronger positive effect on inequality, highlighting its role in deepening income disparities, particularly during the crisis years marked by economic contraction and austerity measures. These results underline the critical need for balanced economic policies that promote inclusive growth while addressing structural inequalities and labor market vulnerabilities. This study also employs advanced econometric methods, including Vector Autoregression (VAR), Vector Error Correction Model (VECM), and Granger Causality Test, to analyze the dynamics between GDP (LOGGDP), income inequality (GINI), and unemployment. The Granger Test reveals that unemployment Granger-causes GDP with a two-period lag, highlighting the importance of labor market conditions for economic growth, while no direct causal relationship is found between GDP and inequality. These methods provide deeper insights into the short- and long-term interactions, offering valuable guidance for balanced economic policymaking. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to explore causal relationship between air transport and economic growth for top ten countries with the largest air transport volume worldwide for the sample period 1970–2021 using conventional bootstrap Toda–Yamamoto and bootstrap Fourier Toda–Yamamoto causality tests. For this purpose, a single composite indicator gathered by principal components analysis as a proxy variable of air transport is used to reflect all dimensions of air transport and to better understand potential effects on the relationship between air transport and economic growth. The empirical findings of the present study revealed that there exists an uni-directional causal relationship from air transport to economic growth for all countries except for Russia and Brazil. A bi-directional causal relationship is also found between air freight transport and economic growth for Japan and between air carrier registered departures and economic growth for China. The results indicate that causality tests based on Fourier approach show more consistent results than conventional causality tests. This study also argues that the use of only one dimension of air transport can lead to relatively weak representativeness of air transport. • The causal relationship between air transport and economic growth is explored. • Uni-directional causal relationship from air transport to economic growth except for Russia and Brazil. • Bi-directional causal relationship between air freight transport and economic growth for Japan. • Bi-directional causal relationship between air carrier registered departures and economic growth for China. • Fourier approach is more consistent than conventional causality tests. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between political instability, economic growth, and Greece's overall stock market index (ASE) returns from 1970 to 2018. The aim is to measure and quantify the impact of political instability on economic growth and the overall stock market returns. The analysis includes six different variables as proxies that quantify political instability. A new Socio-Political Instability index is constructed from these variables by employing the principal component analysis. The empirical part employs GARCH, GARCH-M, Granger causality tests and OLS regressions. The paper provides new insightful results and a new measure of political instability for Greece. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between insurance development, population, economic growth, and health expenditures for a panel of 31 OECD countries over the period 1995–2021. A dynamic panel data analysis based on cointegration, FMOLS, DOLS, VECM, and Granger causality tests is employed to suggest for the existence of a long-run relationship among variables. The long-run results show that insurance development, national income, and population exhibit positive impacts on health expenditures. The results reveal that insurance factor has larger income effects than substitution effects on health expenditures. Regarding the short-run causal relationship between the variables, the empirical results suggest that economic growth strengthens health expenditure growth, while insurance growth reduces it. In the short-run, insurance development has a crowding-out effect since it produces larger substitution effects than income effects. The results provide political implications that governments need to concern the short-run crowding-out effect of private insurance sections on health expenditures when making fiscal policies on public health expenditures. [ABSTRACT FROM AUTHOR]

China has taken sustainable development strategies seriously in recent years, aiming at reducing energy consumption and environmental pollutants emissions. This research empirically evaluates the sustainable innovation efficiency (SIE) in Chinafrom the perspective of energy and environmental constraints. Furthermore, the relationship between SIE and economic growth is tested through Granger causality test. The results indicate that SIE in China varies obviously in different regions. Granger causality runs only from economic growth to SIE and not the other way round. Economic growth is causative factor of sustainable innovation, indicating that China's sustainable innovation has not yet achieved coordinated development with the economy. Our findings also provide useful decision-supporting insights for Chinese policymakers to promote coordinated development of regional sustainable innovation and economic growth. [ABSTRACT FROM AUTHOR]

It is well established that financial development and innovation promote economic growth through improving the allocation of capital, enhancing risk management, contributing to price discovery, and increasing market efficiencies. While a vast empirical literature is devoted to the nexus between financial development and economic growth, however, substantially less research has been done on the relationship between derivatives and growth, especially in the emerging-market context. Derivatives can be viewed as a specific category of financial innovation, which may advance economic growth through its specialised functions of risk management and price discovery. This paper contributes to bridging this gap in the literature by exploring the impact of exchange-traded futures derivatives on South African economic growth, output, and economic growth volatility. It employs ARDL bounds tests, Granger causality tests and GARCH volatility modeling to analyse the effects of exchange-traded futures derivatives on various measures of South African economic activity. The main result is that exchange-traded futures derivatives contribute positively to South African economic growth and economic activity. This may suggest that opportunities might exist in other emerging economies, with financial structures comparable to that of South Africa, to encourage the development of organised and well-regulated derivatives markets to unlock economic growth in these economies. [ABSTRACT FROM AUTHOR]

The difference in the results from previous studies on the impact of inflation on poverty, coupled with an increase in the money supply from direct investment, inspired this research. This study aimed to ascertain how poverty, inflation, and foreign investment affect consumption spending in Indonesia based on 1997-2021 time series data. This study used Vector Autoregression estimation, utilizing data sources from the World Bank. The data will be processed with econometric models. From the study’s findings, it may be inferred that overall consumption affects inflation, which can be seen from the Granger causality test that shows that this variable has a one-way causal relationship. The results of the same test also show that FDI has an effect on total consumption and conversely consumption has an effect on FDI. However, the poverty variable does not affect total consumption and vice versa, because according to the causality test, the variable obtains an insignificant probability value. However, the VECM results explain that poverty has an effect on total consumption, and that the effect of consumption on inflation is due to the larger t-statistic value and has a positive relationship. This implies that the rate of inflation will increase the lower the level of consumption. However, the Impulse Reason test shows that poverty has a negative trend, as does the FDI variable. [ABSTRACT FROM AUTHOR]

This study investigates the long-term and short-term relationships between different monetary aggregates (M0, M1, M2, and M3) and GDP in Saudi Arabia using the Engle-Granger cointegration test and the Granger causality test. The results reveal that M2 has the most stable long-term relationship with GDP, making it the most reliable aggregate for policy formulation. M1 also shows a strong relationship, while M3's connection is comparatively weaker. The causality analysis indicates bidirectional relationships between GDP and M1, M2, and M3, suggesting that changes in these aggregates can both influence and be influenced by economic activity. In contrast, M0 shows no significant long-term relationship and only responds to changes in GDP, indicating its limited policy relevance. These findings highlight the importance of using broader aggregates like M2 for effective policy targeting in Saudi Arabia's evolving economic landscape. The study provides crucial insights for policymakers in selecting appropriate monetary aggregates for long-term planning and short-term economic stabilization. [ABSTRACT FROM AUTHOR]

The relationship between higher education and innovation development is pivotal to advancing Sustainable Development Goals (SDGs), particularly in fostering quality education (SDG 4), decent work and economic growth (SDG 8), and industry, innovation, and infrastructure (SDG 9). Understanding how higher education drives innovation can inform policies to develop human capital, accelerate technological progress, and promote sustainable economic and social development. This paper aims to assess the short-term and long-term impacts of higher education indicators on innovation development in Ukraine. Using data from 2014 to 2022, the study employs a vector error correction model to analyse the relationship between innovation development and higher education indicators. Innovation development was evaluated using the Malmquist productivity index, which incorporates time-series data from the Global Innovation Index to analyse short- and long-term dynamics in resource efficiency and innovation output, with a focus on Ukraine and the Visegrad Four countries for cross-country comparison. Methodological steps include stationarity testing with the ADF test, determining optimal lag length, Johansen cointegration analysis, Granger causality testing, and estimating impulse response functions. The results demonstrate a significant long-term equilibrium relationship between innovation development and higher education indicators. STEM graduates and higher education enrolment exhibit substantial positive long-term impacts, while research capacity and intellectual property payments show significant short-term effects. The findings underscore the transformative role of higher education as a driver of sustainable economic growth and technological progress. Theoretically, the study advances understanding of how education-driven human capital fosters innovation in transition economies. Practically, it offers evidence-based recommendations for policymakers to prioritise STEM education, support research initiatives, and enhance the use of intellectual property to build a robust and sustainable innovation system. [ABSTRACT FROM AUTHOR]

This study examined South Africa's economic growth rate from 1980 to 2022 through an econometric analysis of fiscal and monetary policies. The study sought to investigate the relationships between the economy's growth rate and various fiscal and monetary policy variables, taking into account different economic approaches such as Keynesian, monetarist, and Wagner's perspectives. The methodology used consisted of data preparation, multiple unit root tests, Autoregressive Distributed Lag (ARDL) cointegration analysis, diagnostic tests, and pairwise Granger causality analysis. The empirical analysis found a long-term cointegration among the economic growth rate, government debt, expenditure, and revenue in fiscal policy, though government debt and expenditure were not statistically significant. Contrary to economic theory, increased government revenue had a negative correlation with economic growth. There was no long-term relationship found between the economic growth rate and monetary policy variables such as the official exchange rate, inflation rate, real interest rates, and M3 money supply. Pairwise Granger causality tests revealed a one-way relationship between government spending and economic growth, providing support to the Keynesian approach to fiscal policy. This study also discovered evidence that economic growth Granger-causes inflation, implying that economic growth may have predictive power for inflation, consistent with the demand-pull inflation hypothesis. However, no direct predictive relationships were found between the selected monetary policy variables and economic growth, supporting the long-run theory of monetary neutrality. This study suggests evaluating spending, managing inflation, implementing reforms, closing infrastructure gaps, encouraging investment, and ensuring fiscal sustainability. [ABSTRACT FROM AUTHOR]

The correlation between economic growth, trade openness, and inflation has been extensively studied over the years, yielding varied outcomes. Recent disruptions caused by events such as the COVID-19 pandemic and the Russia-Ukraine war have significantly affected the global economy, resulting in a notable increase in inflation rates, particularly in developing countries. This study investigates the impacts of trade openness and inflation on the Ghanaian economy from 1990 to 2022. Employing the Autoregressive Distributed Lag (ARDL) bounds testing for cointegration and the Granger causality test for empirical analysis, the study reveals a mixed short-term effect, showing both positive and negative impacts of trade openness and inflation on economic growth in Ghana. While no long-term effect of trade openness is observed, inflation is found to have a negative long-term influence on growth. Additionally, the results of the Granger causality test suggest a unidirectional causal relationship between trade openness and economic development.

Purpose – This study aims to investigate the impact of seaport efficiency on economic growth in Ghana over the period 2006–2020. Design/methodology/approach – Comprehensive methodology, diverse data analysis techniques, including Augmented Dickey–Fuller tests, autoregressive distributed lag (ARDL) modeling and Granger Causality, were applied to explore the intricate relationship between Seaport Efficiency and Economic Growth. Findings – The findings reveal a statistically significant and positive association between seaport efficiency and GDP, underscoring the crucial role of efficient seaport operations in actively stimulating economic growth. Beyond seaport efficiency, influential factors such as capital, human capital, knowledge spillover and productive capacities were identified, contributing to the dynamics of economic growth. Research limitations/implications – The Granger Causality Test solidifies seaport efficiency as a robust predictor of GDP fluctuations, emphasizing its significance in economic forecasting. Notably, this study contributes to the existing body of knowledge with its nuanced exploration of the intricate relationship between seaport efficiency and economic growth in the specific context of Ghana. Practical implications – This study’s implications extend beyond academia, offering invaluable guidance for policymakers and planners. It serves as a comprehensive roadmap for informed decision-making, emphasizing the pivotal role of efficient seaports in charting a trajectory for enduring and resilient economic progress in the nation. Originality/value – While the broader theme has been explored in existing literature, the uniqueness of this study lies in its specific application to the Ghanaian context. The choice of Ghana, a nation where maritime transport handles over 90% of trade, underscores the significance of understanding seaport efficiency in this regional and economic setting. The study’s originality is reinforced by incorporating diverse economic variables, aligning with recommendations for a comprehensive analysis of factors influencing port performance.

Industrialization is a key element for economic growth in both developed and undeveloped countries. Due to globalization, the cause-effect between industrialization, economic growth and urbanization are changing. This study investigates the relationship between economic expansion, urbanization, and industrialization in Kenya using a quantitative methodology. Using World Bank economic indicator parameters, it focuses on understanding the complex interrelationships between these factors. Vector Autoregression (VAR) modeling is used to analyze the relationships between GDP, urbanization, and industrialization between 1990 and 2018. The Granger causality test is used to determine the causal linkages between GDP, urbanization, and industrialization. Results show that urbanization is increasing steadily across Kenya, with a high population in central, western, Rift valley, and coastal regions. The availability of agricultural land influences urbanization, with a significant positive relationship between the three parameters. The Granger causality test shows a unidirectional relationship between GDP, urbanization, and industrialization. A minimum of 20% is considered as the benchmark for urbanization to reduce both GDP and industrialization. Unplanned and rapid urbanization, accompanied by ecologically unfavorable industrialization schemes, threatens Kenya's biodiversity. The study provides insight into the interconnection between the three pillars of the economy and the statistical models developed are useful in forecasting future trends. [ABSTRACT FROM AUTHOR]

The relationship between foreign trade and economic growth is a subject of intense debate among economic researchers and policymakers. This study analyze this relationship in Nigeria using advanced statistical techniques which is the Auto Regressive Distributed Lag (ARDL) model bounds test. The study covers the period from 1981 to 2023 and includes pre and post-estimation diagnosis tests to ensure the accuracy of the model. The results indicate the presence of a long-run relationship among foreign trade and economic growth, as confirmed by ARDL bounds test. In the short run, there is a significant association between foreign trade and economic growth. The Granger causality test reveals a bidirectional causality between economic growth and foreign trade. Based on these findings, it is suggested that the Nigerian government needs to moderate its trade policy as the economy seems too weak to absorb the adverse shocks from external trade. Most importantly, the problem that arises from exchange rate should be tackled and put in place to offset the likely negative effects of exposing the economy to external influences. [ABSTRACT FROM AUTHOR]

This paper explores the cause-and-effect relationship between the elderly population and global economic growth, focusing on different continents. A panel dataset spanning from 1961 to 2020 is utilized, with Gross Domestic Product (GDP) serving as the key measure for economic growth, represented as the percentage change in annual GDP. The study specifically centers on individuals aged 65 and above as a percentage of the total population. The analysis employs a Panel Granger causality test to assess the impact of the elderly population on economic growth. The results reveal a unidirectional Granger causality for Africa and Oceania, suggesting a one-way influence from the elderly population to economic growth. Conversely, instances of bidirectional Granger causality are identified for Asia, Europe, North America, and South America, indicating a mutual influence between the elderly population and economic growth during the study period. The study concludes that an endogenous relationship between economic growth and the elderly population emerges, but notably, this relationship becomes apparent only after an economy has completed its transition in economic development. This implies that the dynamics of the elderly population and economic growth are interlinked, with the nature of their interaction becoming more pronounced in the later stages of economic development. [ABSTRACT FROM AUTHOR]

The study explores both the long- and short-run liaisons between three conceptual dimensions: economic growth, energy consumption, and trade openness in 29 net energy importing middle-income economies using annual data from 1990 to 2019. We hereby assess ARDL models which examine the long-run links by integrations in between these three conceptual variables, and additionally Dumitrescu-Hurlin and Granger causality tests for panel and individual country models, respectively. For panel country samples, we reveal bidirectional causality connection between trade openness and economic growth along with unidirectional causalities from economic growth to energy consumption and from energy consumption to trade openness in the short-run. Bidirectional positive feedback relationships stand between economic growth - energy consumption and trade openness - energy consumption in the full sample and the upper middle-middle economies subsample in the long-run. Findings for individual country estimations reveal significant long-run relationships between energy consumption and economic growth in 12, energy consumption and trade openness in 6, and economic growth and trade openness in 9 of the middle-income economies examined. [ABSTRACT FROM AUTHOR]

This research aims to explore the long- and short-term relationships and the quality of interactions between variables within the framework of the Sustainable Development Concept, focusing on the social aspect (Human Development Index), economic aspect (economic growth), and environmental aspect (Environmental Quality Index) in the context of reducing poverty rates in Indonesia. The methodology employed is the Panel Vector Error Correction Model (P-VECM) analysis for panel data, combining time series (2010-2022) and cross-section data (34 provinces in Indonesia), along with a Cartesian diagram to identify which provinces have the greatest potential for achieving evenly distributed SDG progress. The results show that the Granger causality test reveals no one-way or two-way causal relationships or interactions between the human development index, economic growth, and environmental quality index. In the longterm analysis, only the human development index significantly impacts poverty, with a negative correlation. In contrast, economic growth and the environmental quality index do not have a long-term relationship with Indonesia's poverty levels. These findings suggest that improving the quality of education, healthcare, and living standards in the long term can effectively reduce poverty, especially in Indonesia. Pro-poor government policies are crucial to prevent widening inequality and ensure that economic growth benefits the upper class and the lower and middle classes through more equitable income distribution. [ABSTRACT FROM AUTHOR]

Unquestionably, all countries prioritize maintaining peace and fostering long-term sustainable economic growth. For this purpose, this study assessed the impact of military expenditure on economic growth using a multivariate regression model based on the enhanced production function in the presence of energy consumption. The study clustered 48 Islamic countries into their income levels over the period from 1990 to 2018, and using the dynamic common corrected effects in determining the elasticities of the explanatory variables. The empirical results revealed a negative effect of military expenditure on economic growth and the elasticity of military expenditure to economic growth was lowest in upper-middle-income countries than in the other three groups. In the main panel a 1% increase in military expenditure led to a 0.101% decrease in economic growth. The results of the paired Dumitrescu Hurlin panel causality test revealed a bidirectional causal affiliation between economic growth and military expenditure. In addition, the empirical findings revealed that the levels of military expenditure, as a component of total government expenditure, are too high in the employed economies and need to be transferred toward more productive non-military expenditure in order to improve the economic growth performance and other growth determinants. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Business Economics & Management Research is the property of Bayburt University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the relationship between domestic investment, economic growth, and carbon dioxide (CO2) emissions in the United States and Canada from 1990 to 2021 using ARDL bound testing. The findings reveal a long-run relationship between the variables in both countries. In the US, short-run results show a positive link between domestic investment and CO2 emissions, while economic growth has no significant impact. In the long run, only domestic investment positively influences CO2 emissions. Other factors such as trade openness exhibit positive short-run effects but long-run negative relationships with CO2 emissions, while fossil fuel consumption positively impacts emissions. Granger causality tests reveal bidirectional links between fossil fuel consumption and CO2 emissions, and a unidirectional causality from trade openness to CO2 emissions in the US economy. In Canada, positive short- and long-term connections exist between domestic investment and CO2 emissions. FDI and economic growth exhibit mixed short-run effects on emissions but positive long-term impacts. Fossil fuel consumption negatively affects emissions in both the short and long term, while trade openness shows a positive long-term effect. The findings stress the need for targeted policies to balance economic growth, investments, and environmental sustainability, including promoting renewable energy, sustainable trade, and clean technologies. [ABSTRACT FROM AUTHOR]

This study examines the nexus between trade, financial development, remittances and economic growth in Zimbabwe using time-series data collected from the World Bank Worldwide Development Indicators database from 1980 to 2022. Vector autoregression models were estimated using Stata/SE 14.2 to analyse “short-run” relationships among the four variables. The results obtained showed the non-existence of cointegration equations in the series. The significant findings are the positive “short-run” causal effects of first lag GDP regressor on GDP at 0.05%, first lag remittances regressor on GDP, first lag financial development regressor on financial development, and first lag trade and remittances regressors on remittances, at 0.01% level of significance. Moreover, the Granger causality test showed that the remittances Granger causes GDP and trade Granger causes remittances in the “short-run”, while the opposite is true for other variables. This study is essential to researchers and policymakers. It is recommended that the government formulate policies that promote the inflow of remittances, trade, and financial development for meaningful economic growth. [ABSTRACT FROM AUTHOR]

This study investigated the correlation between inflation and economic growth in ASEAN-5 countries from 1990 to 2020. The main objective of this study is to explore the causal connection between inflation and economic growth. The results demonstrate variations in the relationship between economic growth and inflation in these countries. Of the five ASEAN countries, we found that inflation hurts economic growth in the Philippines and Indonesia, but not Singapore. This research revealed a stationary economic growth series in all countries except for the Philippines. The inflation rates were found to be stationary for all ASEAN-5 countries. Furthermore, Granger causality tests suggested either a feedback or oneway causal relationship between economic growth and inflation in all countries except Malaysia. Our panel estimation also provides interesting findings that complement time-series analysis. Our findings shed light on the complexities of the inflation-economic growth relationship within ASEAN-5 countries and contribute to a better understanding of their economic dynamics in the age of digitalisation. [ABSTRACT FROM AUTHOR]

The objective of this study is to analyse the impact of Zakat distribution, inflation, consumption, and international trade on the economic growth of Indonesia using the Vector Error Correction Model (VECM) analysis. The VECM analysis comprises several tests, including the unit root test, stability test, cointegration test, and Granger causality test. This study found that consumption, exports, imports, and Zakat exert a favourable influence on economic growth; however, inflation has an adverse impact on economic growth. Zakat expenditure indicated a positive relationship with gross domestic product level in the long term. The results of the Granger causality test implied a two-way causal interconnection between Zakat expenditure and economic growth. Zakat can trigger the country's economic expansion by increasing consumption, investment, or government spending, and an increase in national income will encourage an increase in Zakat distribution. Moreover, the augmentation of national income will foster an upsurge in the distribution of Zakat. The future tax potential is immense because the total population of Indonesian Muslim residents in 2022 is predicted to be 241.7 million people, or the equivalent of an 87.02 per cent increase. [ABSTRACT FROM AUTHOR]

Purpose: This paper explores whether data back the claim that imports of armaments are inherently bad for economic growth. Regardless of one's point of view, the production and trade of weaponry is a significant industry with serious economic implications that warrant investigation. The financial repercussions of military spending have been extensively studied, but the economic effects of arms importation remain unknown. Design/methodology/approach: This study adopts a pooled mean group approach to investigate the nexus between arms imports, military expenditure and per capita GDP for a balanced panel of twenty-five of the top arms importers in the world from 2000 to 2021. Findings: The authors find that arms imports and military spending negatively impact GDP per capita in the short run, but military spending is beneficial over the long run. The authors also used the Dumitrescu Hurlin Granger causality test, which revealed a unidirectional causation between per capita GDP and military expenditure, and a unidirectional causal relationship from military spending to arms imports. Research limitations/implications: This paper is deficient in a few aspects: first, it looks at only those countries comprising the top 70% of arms imports. Second, it omits many political, technological and legal factors that impact arms imports and military expenditures. Originality/value: This paper looks into the impact of defense spending and arms imports on economic growth for twenty-five nations with the highest share of arms imports in recent times. It is a significant addition to the literature as it resolves the debate of whether or not the military expenditure is wasteful and whether arms imports significantly harm the nation's economic growth. [ABSTRACT FROM AUTHOR]

Taking a sample of 24 OECD countries, using a cointegrated panel, empirical evidence is provided at group and individual level of the positive effect of spending on research, development and innovation on economic growth during the 2000-2019 period. Assuming that patents act as a proxy for innovation and using the ordinary least squares dynamic estimator, the existence of a long-term equilibrium relationship is corroborated by which, and in per capita terms, an increase of 1.0% in the stock of patents generates an increase in GDP of 0.52%. Similarly, an increase in R&D spending of 1.0% translates into GDP growth of 1.27%. Additionally, by implementing a Granger causality test for a panel, a positive and significant relationship is found between R&D spending and the stock of patents, patent stock and economic growth, and R&D spending and economic growth. [ABSTRACT FROM AUTHOR]

Bangladesh, being the fastest growing economy in the South Asian region, necessitates a comprehensive study to evaluate the influence of various socio-economic factors. The primary objective of this study is to get a comprehensive understanding of the concept of sustainable development and its relationship to carbon emissions. This analysis will specifically consider the current status of economic and anthropogenic activities within the context of Bangladesh. This research examines the aforementioned matter by utilizing the latest accessible yearly data spanning from 1990 to 2020, as well as employing advanced econometric models including the dynamic autoregressive distributed lag approach and frequency domain causality test. The analysis of empirical data reveals that the economic growth experienced in Bangladesh has yielded a discernible and favorable influence on the degradation of the environment, in both the immediate and extended periods. Nevertheless, it is crucial to acknowledge that the observed impact holds no statistical significance. Furthermore, it is apparent that energy consumption has a substantial impact on the escalation of carbon emissions, in both the immediate and prolonged periods. Additionally, the processes of industrialization and foreign direct investment have also exerted adverse effects on short-term carbon emissions. A frequency domain causality test is used in this work to do a robustness analysis and confirm that there are causal links between economic growth, energy use, development, and carbon emissions over a range of time frames, such as the short, middle, and long terms. The above studies have given us a lot of useful information about how economic growth, energy use, industrialization, and environmental sustainability all affect each other in Bangladesh. Bangladesh should prioritize the formulation of policies and regulations that are centered around specific goals. These objectives include: (a) enhancing government engagement in activities related to environmental innovation, (b) integrating ecologically sustainable development targets by adopting renewable energy sources, and (c) devising strategies and initiatives to attract foreign direct investment, facilitate knowledge exchange, and promote energy-efficient manufacturing to stimulate economic growth. [ABSTRACT FROM AUTHOR]

Economic theory argues that foreign direct investment (FDI) and external debt are expected to enhance economic growth in any given economy. Consequently, this study (i) investigated the relationship between foreign direct investment, external debt servicing, and economic growth in Nigeria; (ii) investigated how foreign direct investment and external debt impact Nigeria's economic growth; and (iii) analyzed the direction of causality among the three macroeconomic variables. Descriptive statistics, time series autoregressive distributive lag, and robust Granger causality tests were adopted as the estimating techniques. The results showed that from 2011 to 2022, Nigeria's FDI continued to decline, Nigeria's external debt servicing continued to grow on an upward trajectory, and the growth of the GDP has been meandering. ARDL analysis results confirmed that the lag of FDI and current exchange rate exert positive effects on current economic growth in Nigeria, with a 1% increase in FDI, current external debt, and current exchange rate increasing growth by 1.49%, 1.58%, and 0.02%, respectively. Results from the Granger causality showed that FDI and external debt do Granger cause GDP in Nigeria. Policymakers should focus on prudent debt management practices and strive to reduce domestic debt levels. [ABSTRACT FROM AUTHOR]

With the lack of finance, many developing nations are struggling for investment in several areas to generate an opportunity for sustainable livelihood, and Foreign Direct Investment (FDI) emerged as an engine of economic growth, especially in developing nations. It helps to strengthen the economy by mainly promoting capital inflow and technical improvement into the recipient economies. However, some literatures found economic growth, responsible for the inflow of FDI. Therefore, this paper attempts to examine the causal relationship between FDI and Economic Growth in India. By running the Granger causality test in VECM settings, this study found, GDP causes inflow of FDI in India. [ABSTRACT FROM AUTHOR]

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Numerous studies conducted by various scholars have aimed to ascertain the impact of monetary policy on economic growth. However, these empirical investigations have not reached a unanimous consensus. Therefore, this study analyzes the effect of monetary policy. To address this objective, this study employed ARDL and error correction model (ECM) based on annual data from 1993 to 2022. Granger causality test was also employed to check the direction of causal effects of one variable on the other variable. All required pre and post estimation tests were performed and verified that the model was statistically viable. The study revealed that, in the short run, deposit interest rate, reserve required amount, and open market operation have positive and statistically significant effects on real GDP growth of Ethiopia; however, money supply has negative and statistically significant effects on real GDP growth of Ethiopia. In the long run, money supply has positive and statistically significant effects on real GDP growth of Ethiopia; however, deposit interest rate and reserve required have negative and statistically significant effects on real GDP growth of Ethiopia. To sum up, in the short run, contractionary monetary policy was promising, and in the long run, expansionary monetary policy was favorable for economic growth. The Granger causality test result shows that there is bidirectional causality between monetary policy and economic growth; except there was a unidirectional relationship between deposit interest rate and economic growth. Ultimately, this research suggests the following policy recommendation: for short-term economic enhancement, it is advisable for the government to opt for a contractionary monetary policy rather than an expansionary one. On the other hand, for long-term economic improvement, an expansionary monetary policy is more favorable than a contractionary one. [ABSTRACT FROM AUTHOR]

The effect of the female labour force participation rate on urbanization, which is the question of reverse causality, was not investigated in the earlier literature despite the widespread belief that urbanization leads to modernization and social transformation. The paper used World Bank data from 217 countries from 1991 to 2022 to address this issue. The Random Effect (RE) Two-Stage least squares (2SLS) regression analysis suggests that urbanization has a detrimental effect on the ratio of female to male labour force participation. On the other hand, the proportion of women to men participating in the labour force positively influences urbanization. The GDP growth rate and the proportion of female employers favourably influence the participation rate of women in the labour force. However, the estimated results do not support the idea that long-term economic growth and the percentage of women in the labour force follow a U-shaped pattern. The results do not support a U-shaped association between the female labour force participation rate and urbanization. However, a causal and long-term stable association exists between female labour force participation rate and urbanization. Finally, we suggest several policies that will benefit women's labour force participation rate during the process of economic growth. [ABSTRACT FROM AUTHOR]

This study evaluates the trend and growth pattern of international tourism and analyzes the impact of tourism on the economic growth of Kerala for the past four decades from 1980 to 2019. The time series analysis employed in this study uses the secondary data on Net State Domestic Product (NSDP) of Kerala at constant prices, foreign tourist arrivals (FTA), and foreign exchange earnings (FEE) at constant prices, collected from various sources of the State and Central Government. The methodology of this study uses the Augmented Dickey Fuller (ADF) test for unit root, followed by the Johansen Cointegration test, the Vector Error Correction Model (VECM), and the Granger Causality test. The results of the analysis reveal the existence of a positive and significant unidirectional long‐run causality running from tourism to the economic growth of Kerala and a bidirectional causal relationship between tourism development and the economic growth in the short run. [ABSTRACT FROM AUTHOR]

Openness to international trade is often conducive to long-term economic development. Indeed, thanks to trade instruments based on an effective and selective policy of openness, and to human capital that is both qualified and specialised, trade liberalisation is a key determinant of healthy and progressive economic growth. The aim of this article is to study the nature and direction of causal relationships in a dynamic framework, between the variable to be explained (trade openness) measured by the volume of exports and imports as well as by human capital, and the variable to be explained (economic growth) measured by GDP at the level of Morocco. In this respect, we will attempt to examine this causal relationship in the Moroccan context. From this perspective, our question, which remains important, can be formulated as follows: To what extent does trade openness promote economic growth in Morocco? In order to find more relevant answers to our question, we carried out a mixed analysis (both theoretical and empirical) based on mortgagedeductive reasoning derived from a purely positivist posture, on the one hand, and, on the other, we applied econometric modeling to the case of Morocco, based on the ARDL approach. The data collected is annual and covers a period from 1985 to 2020. It was gathered from the HCP and World Bank databases. To do this, we used the ARDL method. The results received by the econometric modeling and the tests that verify the relationship and the direction of causality indicate that trade openness have a positive influence on Moroccan economic growth. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine the effects of agricultural subsidies and agricultural employment on economic growth in Türkiye by utilizing annual data for the period 2000-2022. Benefiting from empirical analysis, the variables in the study were primarily tested with the unit root test. The differences of the variables for which unit roots were determined were purified from unit roots as the Augmented Dickey-Fuller (ADF) test suggests. Appropriate lag test was applied to the series and then the causality relationship between economic growth, agricultural employment rate and agricultural support amount was analyzed according to the results of cointegration, error-corrected VAR estimation, and Granger causality test. Based on the results of the analysis, agricultural subsidies do not have a significant effect on economic growth or economic growth on agricultural subsidies, whereas agricultural employment has a bidirectional and positive effect on economic growth. Causality findings indicate no causality between agricultural subsidies and economic growth. A bidirectional and positive economic growth as a result of agricultural employment was determined, and the existence of a causality relationship between the two variables has been demonstrated. In conclusion, it has been found that agricultural subsidies provided for economic growth in Türkiye have not yielded effective results, whereas agricultural employment provided positive reflections. Therefore, taking measures for a controlled transition from the agricultural sector to non-agricultural sectors over time, thus increasing the quality and adaptability of the workforce in the sector, and recording employment through incentives will make a great contribution to the solution of the problem. [ABSTRACT FROM AUTHOR]

The impact of macroeconomic factors offers insight into the performance of an economy. This study investigates the dynamic short- and long-term effect of trade openness, external debt, and foreign direct investment (FDI) within Ghana's economy. Utilizing Autoregressive Distributed Lag (ARDL) bound testing and Granger causality analysis, the study examines data spanning from 1991 to 2022. The results of the ARDL cointegration test reveal a long-term relationship among the variables. However, in the short term, the findings present a mixed effect of FDI and trade openness, with both positive and negative impacts. In the long run, FDI and external debt exhibit a positive influence, whereas trade openness appears to impede economic growth. Furthermore, the Granger causality test identifies a unidirectional causality relationship between the variables and economic growth. The study suggests that the government implement investment-oriented and trade policies to stimulate economic growth. [ABSTRACT FROM AUTHOR]

Although the movement of people from rural to urban areas has caused the increased use of energy, the abundance of water resources can be made into a form of renewable energy known as hydroelectricity. As European countries are ranked as the first users and exporters of hydropower, the production of renewable energy in developed countries such as the Nordic region has caused great impacts on economic growth and human development. The importance of this paper is to investigate the relationship between hydroelectricity and the Human Development Index by depending on some variables such as urbanization, rule of law, corruption, trade openness, and GDP per capita from 2002 to 2021 in Nordic countries. The results were estimated depending on impulse response function after conducting the Vector autoregressive model (VAR) model and Granger causality test. Results showed a negative impact from hydro plants in the short run but a significant positive impact in the long run in Nordic countries. The long-term sustainment of Human Development Index (HDI) is due to policies limiting the immigration of labor as well as protection of energy use. Water batteries are gaining popularity across Europe and their implementation is near mandatory. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the interrelationship between financial stability and economic growth with a comprehensive analysis. Design/methodology/approach: The panel Granger causality testing approach is carried out to the panels of the Fragile Five (F5) and the Group of Seven (G7) countries for the period 1998–2020. To capture the different aspects of financial stability the authors use eight different indicators. Findings: The findings reveal some important implications: the relationship between financial stability and economic growth is sensitive to the financial stability indicators for both the F5 and G7 countries. The stability indicators related to the credit market contain much more causality relationship with economic growth than the indicators related to the stock market. Z-score and provisions to nonperforming loans (NPLs) are among the two variables with the highest causality relationship with economic growth. The least number of causality link is found for the Regulatory Capital Ratio and Stock Price Volatility in F5 countries and Credit Ratio, NPLs and Stock Price Volatility in G7 countries. Economic growth affects financial stability through credit market stability indicators and mostly for the F5 countries. No causal relationship is found for any of the financial stability indicators of Canada, the UK and the USA from economic growth to financial stability. Originality/value: Since the linkages between financial stability and economic growth may vary due to country/group specific differences, apart from the previous studies, the authors select two different groups of countries in terms of financial stability and economic size. [ABSTRACT FROM AUTHOR]

Japan's recent enunciation of a "Free and Open Indo-Pacific" policy aims to promote principles such as free trade, freedom of navigation, and encouraging economic prosperity with building commitment to stability and peace connecting the economic hub of Asia to Africa (MFA, 2019). Natural gas use continues to dominate Japan's energy mix despite efforts to improve environmental protection and attain the Sustainable Development Goals (SDGs). Also, increasing production and investment typically leads to a better quality of life and more disposable income for the populace, which promotes economic growth. To this end, the study investigates the relationship between economic growth, trade openness, and natural gas consumption, as well as gross fixed capital formation and carbon dioxide emissions to overcome omitted variable problems to explore the natural gas-economic growth hypothesis in Japan over the period 1980–2020. Empirical results reveal a long-run relationship among the variables under consideration. By applying the Toda and Yamamoto approach to Granger causality testing, a two-sided causality running from CO2 and economic growth was revealed, while a one-sided causality from economic growth to natural gas consumption. This outcome suggests that the natural gas-economic growth hypothesis is not valid for Japan. According to these outcomes, policymakers in the energy sector should consciously diversify their energy portfolio in line with the Sustainable Development Goals (SDGs) for Japan. Also, it is recommended that there should be a provision of access to skilled labor to increase productivity and export finished products to boost a nation's economy. [ABSTRACT FROM AUTHOR]

Bu çalışmanın temel amacı Türkiye için 2005-2023 yılları arasında çeyreklik veriler temel alınarak inşaat sektörü, istihdam ve ekonomik büyüme arasındaki ilişkiyi Zivot-Andrews (ZA) birim kök, Phillips-Perron (PP) birim kök, ve GMM testleri uygulanarak ele almaktır. Ayrıca Granger nedensellik testi kullanılarak değişkenler arasındaki ilişkinin gücü ve yönü hesaplanmıştır. Zivot-Andrews (ZA) birim kök ve Phillips-Perron (PP) birim kök testleri sonuçlarına göre I(1) düzeyinde tüm seriler durağan olarak tespit edilmiştir. Ayrıca, GMM analizi sonuçları, Türkiye için 2005'ten 2023'e kadar istihdamın ekonomik büyümeyi etkilediğini ortaya koymaktadır. Granger nedensellik testi sonuçlarına göre ise gecikme uzunluğu 2 iken hem inşaat sektörü ekonomik büyümenin hem de ekonomik büyüme inşaat sektörünün Granger nedenidir. Başka bir ifadeyle değişkenler arası kısa vadeli bir ilişkinin yanı sıra aralarında çift yönlü bir ilişki de vardır. Aynı şekilde istidam ile ekonomik büyüme arasındaki ilişkiye bakıldığında hem kısa vadeli ilişki hem de birbirleri arasında çift yönlü bir ilişki mevcuttur. İnşaat sektörü ile istihdam arasındaki ilişki gözlemlendiğinde ise hem birbirleri arasında kısa vadeli ilişkinin varlığından söz edilebilir hem de aralarında çift yönlü bir ilişki vardır. Sonuç olarak, Türkiye’de iyi planlanmış kamu harcamaları ve kamu inşaat işlerine uygulanan vergilerle ilgili uygulanan akılcı maliye politikaları istihdamı teşvik edecek ve inşaat faaliyetlerini istikrara kavuşturacaktır. Türkiye’de hükümet ve politika yapıcıların uygulayacağı bu adımlar sayesinde daha kalıcı hale getirilen inşaat faaliyetlerinin oluşturacağı istihdam alanları beraberinde istikrarlı bir ekonomik büyümeyi de destekleyecektir.

This paper investigated the dynamic and causal relationship among energy intensity, economic growth, urbanization, energy consumption, FDI, and PM2.5 in 1995–2019 period for China, India, Germany, Canada, USA and United Kingdom countries through Panel Fourier Bootstrapping ARDL (PFBARDL) model and Panel Fourier causality test. According to PFBARDL results, the evidence of cointegration between the variables was detected. In the PFBARDL model, the error correction coefficient is determined as -0.169. Results showed that there is a bidirectional causality between economic growth and PM2.5 release, between fdi and PM2.5 release, between energy intensity and PM2.5 release. Rising economic growth, energy consumption structure, and urbanization will have an adverse effect on PM2.5 concentrations. Policy makers must carefully balance the connection between mitigation of PM2.5 and diminishing energy consumption, and increasing economic growth, urbanization, and energy intensity for determining policies to control PM2.5 concentrations. Thus, in order to reduce PM2.5, the governments must explore a new economic pattern to decouple the linkage between PM2.5 and economic growth. [ABSTRACT FROM AUTHOR]

The study investigated the effect of exchange rate on economic growth in Nigeria using annual time series data from 1970 to 2021. The data were obtained from Statistical Bulletin published by the Central Bank of Nigeria 2021. The empirical studies reviewed had divergent views on the impact of exchange rate on economic growth in Nigeria. The study began with the test of unit root using Augmented Dickey-Fuller (ADF) and Philip-Peron (PP) unit root tests, followed by Johansen cointegration test, vector error correction model (VECM). The VECM indicated that exchange rate appreciation contracts output. The granger causality tests revealed that exchange rate and economic growth reinforce one another. However, based on these findings, it becomes imperative to build adequate foreign reserve to cushionoff trade shocks, promote import substitute industries, diversification of economy and enhance export oriented industries and reduction in cost of borrowing to enable domestic firms to benefit from the theoretical advantages of exchange rate variation. These measures promote the performances of macroeconomic variables in Nigeria. [ABSTRACT FROM AUTHOR]