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Dynamic Linkage Between Economic Growth and Human Development: Time Series Evidence from Nigeria
Author(s) -
Chikalipah Sydney,
Okafor Godwin
Publication year - 2019
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3390
Subject(s) - cointegration , economics , causality (physics) , linkage (software) , stock (firearms) , econometrics , human development (humanity) , watson , ordinary least squares , time series , economic growth , mathematics , statistics , geography , computer science , physics , archaeology , quantum mechanics , natural language processing , gene , biochemistry , chemistry
A consensus among academics and policymakers holds that investing in human development not only improves lives, but also by itself promotes stellar economic growth. We investigate these claims by estimating the two‐way causality between economic growth and human development in Nigeria over the period from 1961 to 2015. By employing three statistical frameworks (Gregory–Hansen Cointegration, Stock–Watson Dynamic Ordinary Least Square and Vector Error Correction Model), our estimates suggest the following. First, economic growth and human development share a long run relationship, that is, they are cointegrated. Second, despite the two variables sharing a long run relationship, only economic growth can exercise a positive effect on human development, and no evidence of reverse causality was observable. Far importantly, we prescribe a policy recommendations from these findings. © 2018 John Wiley & Sons, Ltd.