DYNAMIC INTERACTION BETWEEN CAPITAL FLOWS, EXCHANGE RATES AND GROWTH: EVIDENCE FROM NIGERIA | Journ

For the years 1986 to 2014, this article looks at the link between capital flows, exchange rates, and growth in the Nigerian economy. Capital inflows respond negatively to changes in the exchange rate, according to empirical data from the impulse response using the vector autoregressive (VAR) technique. Furthermore, the findings reveal that capital inflows are positively correlated with economic growth, implying that the stronger the economic growth, the greater the capital inflows. The study also reveals that exchange rates respond positively to capital influx shocks, implying that the more capital inflows, the higher the value of the Nigerian currency. Furthermore, growth responds positively to capital influx shocks, implying that the bigger the capital inflows, the faster the pace of economic growth. The capital variance decomposition Growth has a significant impact on capital inflows, as shown by inflows. Furthermore, the variance decomposition of the exchange rate reveals that capital influx has a large impact on exchange rate fluctuation. Furthermore, the study's findings suggest that capital inflows and exchange rates have nearly identical effects on economic development. Finally, using Granger causality to determine the causal link between the variables, it was discovered that growth and capital inflows in Nigeria had a unidirectional causal relationship. The study's conclusion is that the government should devise and execute measures to boost economic growth and capital inflow.

Please see the link :- https://www.ikprress.org/index.php/JET/article/view/45