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Econometric Analysis of the impact of inflation, unemployment, and economic growth on poverty reduction: A novel application of Asymmetric technique

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  • Ekpeyong, Paul

Abstract

This study conducts an econometric analysis using time series data from 1980 to 2021 to examine the relationship between explanatory factors and poverty in Nigeria. The study employs both short-run and long-run estimates through the Non-Linear Autoregressive Distributive Lag (NARDL) approach. By utilizing a comprehensive dataset and applying various econometric methodologies, the study aims to provide reliable results. The findings suggest that in the short run, inflation, unemployment (positive and negative shocks), and population significantly influence poverty rates in Nigeria. However, these effects are not statistically significant at conventional levels. In the long run, population growth, unemployment, and inflation (negative shock) do not have a substantial impact on poverty. On the other hand, economic growth, as measured by GDP growth, demonstrates a positive relationship with poverty reduction. The analysis indicates that sustained economic growth leads to lower poverty rates over the long term. Based on these results, the study emphasizes the importance of promoting sustainable economic growth as a key strategy for poverty reduction in Nigeria. Policy measures that focus on job creation, inflation control, and investment in human capital development are crucial for poverty alleviation. Additionally, addressing the specific needs of vulnerable populations and regions with high poverty rates should be prioritized. This study contributes to the existing literature by providing empirical evidence on the relationship between explanatory factors and poverty in Nigeria. The findings underscore the significance of a comprehensive approach that combines inclusive economic growth with targeted policies to address the structural factors underlying poverty.

Suggested Citation

  • Ekpeyong, Paul, 2023. "Econometric Analysis of the impact of inflation, unemployment, and economic growth on poverty reduction: A novel application of Asymmetric technique," MPRA Paper 117762, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:117762
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    References listed on IDEAS

    as
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    3. By Mohsin S. Khan & Abdelhak S. Senhadji, 2001. "Threshold Effects in the Relationship Between Inflation and Growth," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 1-1.
    4. Evelyn Nwamaka Osaretin Ogbeide & David Onyinyechi Agu, 2015. "Poverty and Income Inequality in Nigeria: Any Causality?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 439-452, March.
    5. Aigbokhan, B.E., 2000. "Poverty, Growth and Inequality in Nigeria: A Case Study," Papers 102, African Economic Research Consortium.
    6. Mohammed Yelwa & Okoroafor O.K.David & Awe, Emmanuel Omoniyi, 2015. "Analysis of the Relationship between Inflation, Unemployment and Economic Growth in Nigeria: 1987-2012," Applied Economics and Finance, Redfame publishing, vol. 2(3), pages 102-109, August.
    7. Evelyn Nwamaka Osaretin Ogbeide & David Onyinyechi Agu, 2015. "Poverty and Income Inequality in Nigeria: Any Causality?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 439-452.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; Unemployment; poverty; NARDL; Positive shock; Negative shock;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • H1 - Public Economics - - Structure and Scope of Government

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