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Energy Demand, Income Differentials, and Economic Growth in Nigeria

Benjamin Olusola Abere, Igienekpemhe Mohammed Umole

Abstract

This study examined the impact of Energy demand and Income differentials on Economic Growth in Nigeria. The World Bank development indicators and the Central Bank of Nigeria Statistical Bulletin provided the secondary data required for the analysis which used the ECM and Johansen Co- integration approach. The explanatory variables include Energy demand, Income differentials and Exchange rate in the country. The model of this study is built on the hybrid or income differential energy demand model. The result of our findings indicates inverse relationship between Gross Domestic Product and energy demand in the country in the long run while having a positive relationship in the short run. More also, there exist an inverse relationship between Income differential and the Gross Domestic Products in long run and it exhibit direct relationship the short run In addition, there is inverse relationship between exchange rate in the country and the Gross Domestic Products GDP in the short run while having a positive relationship in the long run. This study recommends that; investors and policy makers should make use of income differentials statistics to design market stabilization strategies based on the variations in how various exchange rates react to energy demand and economic growth

Keywords

Energy demandIncome differentialsEconomic growth.

References

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