Macroeconomic Volatility, Public Health Expenditure: Implications for Economic Growth in Nigeria

Abstract

This study examines the implications of macroeconomic volatility and public health expenditure on economic growth in Nigeria using annual time series data. Unit root tests reveal a mixed order of integration among the variables, justifying the application of the Autoregressive Distributed Lag (ARDL) model. The ARDL bounds test indicates the absence of a stable long-run relationship, while the Error Correction Model (ECM) captures the short run dynamics. The results show that economic growth is largely driven by its past values, indicating strong persistence. Inflation and interest rates exert negative effects on growth, while exchange rate and investment display mixed impacts. Public health expenditure contributes positively but weakly, suggesting inefficiencies in the health sector. Chemical exports consistently enhance growth, whereas carbon dioxide emissions exhibit unstable effects. The error correction term is positive and insignificant, implying weak adjustment toward equilibrium.