A Generalized Lambda Distributed (GLD) Quantile Method for Estimating Determinants of Economic Growth in Nigeria

Abstract

This study examined the determinants of economic growth (GDP) in Nigeria using domestic debt (DDT), foreign debt (FDT), interest rate (INR), the exchange rate (EXR) and trade openness (TOP). A employed the generalized lambda distribution (GLD) quantile model was employed to explore the data collected from Central Bank of Nigeria (1986-2021). The fitted GLD quantile model fitted were GLD25Q, GLD 50Q, GLD75Q and FGLD with the location parameter of 1.8464e-08, -1.7596e-06, 1.8834e-06 and -0.0253 respectively. The scale parameter for the fitted GLD quantile model were 60332.0, 50575.0, 46236.0 and 34.1488 for the GLD25Q, GLD50Q, GLD75Q and FGLD model respectively. The space parameters denoted by  of the distributions and from the result GLD25Q, GLD50Q, GLD75Q showed that the economy is positively skewed with the estimated coefficient of 0.1726, 0.3605, and 0.2817 respectively while and FGLD showed that the economy in Nigeria was negatively skewed with estimated coefficient of -0.3303 as determined by the identified economic growth drivers under consideration. Therefore, it can be concluded based on the estimated location, scale and space parameters of FGLD as well as the GLD Quantile-Quantile plot that economy was growing in retrogressive direction and the need to curtail the situation. To achieve this, openness must be adopted to grow the economy in Nigeria.

Keywords: Domestic and Foreign Debt, Interest Rate, Exchange Rate, Trade Openness, Linear Regression.

DOI: 10.7176/EJBM/15-19-01

Publication date: December 31^st 2023