AN ECONOMETRIC ANALYSIS OF THE IMPACT OF FINANCIAL DEEPENING ON AGGREGATE WELFARE IN NIGERIA

📄 Project Abstract

A general way of evaluating the economic welfare of country is through its household per capita expenditure. Thus, the major purpose for this study is to investigate how the recent financial deepening processes in Nigeria have impacted on aggregate welfare. Private per capita consumption expenditure is used to measure aggregate welfare in this study which serves as a macroeconomic measure of indicators of aggregate welfare. Financial deepening can affect aggregate welfare in various ways and in many outcomes. From the existing literature, the channels of influence through which financial sector deepening affects aggregate welfare are indirectly through growth and directly through increased access to financial services. Financial deepening is represented by two variables, the degree of financial intermediation/development (MS2/GDP) and the ratio of private sector credit to gross domestic product (PSC/GDP). Three modelled equations, with justifications for each, were estimated and analys...