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From table (4) above, the coefficients of ΔlRGDP lagged one through three are statistically significant at 1% level, the %change in Ltds has both contemporaneous and lagged significantnegative effect on change in lRGDP, the result is consistent withOlalekan (2012) thoughcontradicts the finding by Lawrence and Michael (2012), however, conform with the view that external debt service is nothing more than capital flight (Peter, 2005).The %change in lED has significant and contemporaneous positive effect on %change in lRGDP, whichmatches the finding byAdebiyi and Olowookere (2013), yet, the effect is not statistically significant at one period lag. In the same vein, %change LDD is associated with the positive, contemporaneous and significant impact on %change in lRGDP, this is in line with the study by Umaru et.al (2013), Olalekan (2012) and Adebiyi and Olowookere (2013), no lagged effect is found. ThePositive effect of debt is what terms in literatures as crowding-in effect.A unit change crowding-in R is significant only at lagged one through three, however, it exhibited an opposite signs at a dead time (delay period) beginning from one period lag which shows that the economy is stable in the short-run this shows that tight monetary policy have no immediate effect in the model and the effect dies out at the rate of 0.267.The implication is that if it is expected that government use of borrowed funds to finance fiscal deficit willresulted in inflation, then the monetary authority should rise interest rate and then short-term loan should be taken locally and any long term loan should be from external sources this will helps to align the fiscal and monetary policies to achieve a desired result.
The coefficient of the dummy variable is not statistically significant and this implies that the introduction of SAP has not significantly change the effect public debt services on Economic growth.Finally, coefficient of ECM which is -0.267 is relatively small in magnitude and highly significant. This is very interesting result as it indicates that only 27% of the current deviation from the equilibrium will be found in next year. This will confirm aquick convergence in the system and hence the existence of the long relationship between the variables.
131
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Appendices 1
-.86 -.84 -.82 -.80 -.78 -.76
ARDL(4, 2, 2, 0, 4) ARDL(4, 2, 0, 0, 4) ARDL(4, 2, 1, 0, 4) ARDL(4, 2, 3, 0, 4) ARDL(4, 3, 2, 0, 4) ARDL(4, 2, 2, 1, 4) ARDL(4, 4, 0, 0, 4) ARDL(4, 4, 2, 0, 4) ARDL(4, 2, 0, 1, 4) ARDL(4, 3, 0, 0, 4) ARDL(4, 3, 1, 0, 4) ARDL(4, 2, 1, 1, 4) ARDL(4, 1, 2, 0, 4) ARDL(4, 4, 0, 1, 4) ARDL(4, 4, 1, 0, 4) ARDL(4, 2, 4, 0, 4) ARDL(4, 2, 3, 1, 4) ARDL(4, 3, 3, 0, 4) ARDL(4, 2, 2, 2, 4) ARDL(4, 1, 1, 0, 4)
Akaike Information Criteria (top 20 models)
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Table 1A
RGDP TDS ED DD R
Mean 310737.5 138749.0 796821.4 1022950. 0.111059 Median 269457.8 25118.35 313534.1 147080.2 0.079050 Maximum 950114.0 828100.0 4890270. 7118884. 0.320600 Minimum 4219.000 67.31000 175.0000 987.3000 0.001100 Std. Dev. 260795.9 211405.5 1289412. 1784598. 0.081172 Skewness 0.825556 1.584166 1.946566 2.201235 0.880363 Kurtosis 2.851577 4.609775 5.613236 6.973101 2.890689 Jarque-Bera 5.038369 23.15445 40.30673 64.47333 5.705523 Probability 0.080525 0.000009 0.000000 0.000000 0.057685 Sum 13672448 6104957. 35060143 45009810 4.886600 Sum Sq. Dev. 2.92E+12 1.92E+12 7.15E+13 1.37E+14 0.283324
Observations 45 45 45 45 44
Table 2 A
Null Hypothesis: D(LDD) has a unit root Exogenous: Constant
Lag Length: 0 (Automatic - based on SIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -7.126143 0.0000 Test critical values: 1% level -3.596616
5% level -2.933158
10% level -2.604867
*MacKinnon (1996) one-sided p-values.
Table 2B
Null Hypothesis: D(LED) has a unit root Exogenous: Constant
Lag Length: 0 (Automatic - based on SIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -6.723828 0.0000 Test critical values: 1% level -3.596616
5% level -2.933158
10% level -2.604867
*MacKinnon (1996) one-sided p-values.
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Table 2C
Null Hypothesis: R has a unit root Exogenous: Constant
Lag Length: 2 (Automatic - based on SIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -2.266660 0.0872 Test critical values: 1% level -3.600987
5% level -2.935001
10% level -2.105836
*MacKinnon (1996) one-sided p-values.
Table 2 C.i
Null Hypothesis: LTDS has a unit root Exogenous: Constant, Linear Trend
Lag Length: 0 (Automatic - based on SIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -3.407957 0.0636 Test critical values: 1% level -4.186481
5% level -3.518090
10% level -3.189732
*MacKinnon (1996) one-sided p-values.
Table 2 C.ii
Null Hypothesis: LTDS has a unit root Trend Specification: Trend and intercept Break Specification: Trend only
Break Type: Innovational outlier Break Date: 1994
Break Selection: Minimize Dickey-Fuller t-statistic
Lag Length: 0 (Automatic - based on Schwarz information criterion,
maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -5.375045 < 0.01 Test critical
values: 1% level -5.067425
5% level -4.524826
10% level -4.261048
*Vogelsang (1993) asymptotic one-sided p-values.
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Table 2D
Null Hypothesis: D(LNRGDP) has a unit root Exogenous: Constant
Lag Length: 0 (Automatic - based on SIC, maxlag=9)
t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -4.291001 0.0015 Test critical values: 1% level -3.596616
5% level -2.933158
10% level -2.604867
*MacKinnon (1996) one-sided p-values.
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