Munich Personal RePEc Archive

Macroeconomic Volatility, Private Investment, Growth, and Poverty in Nigeria

Addison, Douglas and Wodon, Quentin (2007): Macroeconomic Volatility, Private Investment, Growth, and Poverty in Nigeria. Published in: Growth and Poverty Reduction: Case Studies from West Africa (edited by Quentin Wodon, published in World Bank Working Paper No. 79) (January 2007): pp. 123-137.

[img]
Preview
PDF
MPRA_paper_11113.pdf

Download (1175Kb) | Preview

Abstract

At the time when this paper was written, the latest nationally representative survey implemented in Nigeria dated back to 1996, and the available estimations suggested that two thirds of the population was poor. This high level of poverty was due in large part to macroeconomic volatility that depressed private investment and growth. Using cross-sectional data for 87 countries, we show that real per-capita growth over the period 1980–1994 was a function of productivity growth and investment rates, both of which were negatively effected by volatility (in terms of trade, real exchange rate, and public investments). When comparing Nigeria to high growth nations, we find that most of the growth differential can be attributed to Nigeria’s higher macroeconomic volatility. Simulations suggest that if Nigeria had had lower levels of volatility and better macroeconomic policies, poverty would have been much lower than observed.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.