AN ASYMMETRIC ANALYSIS OF IMPACT OF SELECTED MACROECONOMIC VARIABLES ON THE GROSS FIXED CAPITAL FORMATION IN NIGERIA:

This paper empirically investigated the asymmetric effect of macroeconomic variables on the growth rate of gross fixed capital formation in Nigeria from 1981 to 2020 with secondary data sourced from Central Bank of Nigeria statistical/annual bulletins of various years, National Bureau of Statistics and International Monetary Fund (IMF). Linear and Non linear Autoregressive Distributed Lag (NARDL) Method were employed to estimate the effect of inflation exchange rate and interest rate on the growth rate of Gross Fixed Capital formation while the Toda-Yamato causality test was used to investigate the causal effect of the variables on investment. The findings of the study show that Inflation, Exchange rate and Interest rate have negative relationship with the growth rate of gross fixed capital formation in Nigeria both in short and long run with and without structural break. While exchange rate has insignificant effect on the level of investment in Nigeria in the short run, inflation and interest rate have significant linear relationship with the growth rate of gross fixed capital formation in Nigeria both in short and long run with and without structural break. Unidirectional causal effect exists between Inflation, interest and gross fixed capital formation