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Public Debt Financial Development in Nigeria

Author

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  • Abiodun Hafeez Akindipe

    (Department of Economics, University Of Ibadan)

Abstract

This study examines the effect of public debt on financial development between 1981 and 2016 using Dynamic Ordinary Least Square (DOLS). The focused variables are financial development and public debt. The ratio of private credits to GDP, the ratio of broad money, M2 to GDP and the ratio of commercial bank asset to the sum of commercial bank asset and Central Bank asset are used to measure financial development which is the dependent variable. The control variables include GDP deflator, lending rate, gross fixed capital formation, and government expenditure. ADF and PP tests of the unit root are used followed by the test of cointegration using Johansen and Juselius’s test. The DOLS results indicate that public debt has a positive effect on financial development in Nigeria. This, therefore, supports the safe asset view.

Suggested Citation

  • Abiodun Hafeez Akindipe, . "Public Debt Financial Development in Nigeria," Journal of Economic and Sustainable Growth 2, Office Of The Chief Economist, Development Bank of Nigeria.
    • Handle: RePEc:dbn:vo1is2:2004
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic Growth; Debt; innovation assimilation; companies; Economic Growth; MobileMoney; SME;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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