Abstract
This paper examines the seasonality and stochastic cycle associated with GDP growth in Nigeria using two measures of filter. Our findings include, that the Christiano & Fitzgerald (2003) filter removed low-periodicity stochastic cycles associated with output growth in Nigeria compared to the Hodrick Prescott filter. The smoothed GDP trend further revealed that growth in Nigeria was higher but unstable in periods of development planning than in periods without development plans. This suggests that development planning in Nigeria was not accompanied by judicious mix of fiscal and monetary policy in the 1980s/1990s. Likewise, effort to achieve sustainable growth and development, since the return to democracy in 1999, has not been accompanied by effective planning. To achieve inclusive development therefore, there is the need to return to development planning in order to address the destruction meted by insurgents in the North east and the lack of inclusiveness in Nigeria’s growth observed in recent times.
Highlights
Despite several criticisms and debates calling for new measures of economic progress, gross domestic product (GDP) remains a vital statistic to assess the level of economic prosperity in developing and developed countries
The seasonality associated with GDP growth in Nigeria was examined using quarterly data for the period 1981 to 2013
Empirical evidence favored the strength of the C-F filter in removing low-periodicity stochastic cycles associated with output growth in Nigeria compared to the HP filter
Summary
Despite several criticisms and debates calling for new measures of economic progress, gross domestic product (GDP) remains a vital statistic to assess the level of economic prosperity in developing and developed countries. A study by SDS (2006) noted that recurring seasonal pattern is commonly associated with economic time series. They defined seasonal adjustment as the process of estimating and removing varying seasonal effects from a time series to provide a clearer movement in the trend. This paper examines the trend of GDP (output) growth in Nigeria using data available on quarterly basis for the period 1981 to 2013. More so, it examines the seasonality in the GDP trend and tests the smoothening power of low and high periodicity using two filters: Hodrick-Prescott and the (Christiano & Fitzgerald, 2003).
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