How Far Do Nigerian Capital and Money Markets Promote Each Other in the Economic Growth Process?

Abstract

This study evaluates the extent to which the Nigerian Capital and Money Markets support and promote themselves in the growth process. Employing data, which covers the period 1981 to 2015 and sourced from Central Bank of Nigeria’s Statistical Bulletin, this study employs Stationarity and Granger Causality techniques. The results provide substantial evidence to confirm the prevalence of substantial bi-directional causality between money and capital market operations in Nigeria. Consequently, the study recommends for more professionalism, disclosure of information as enhanced public enlightenment to ensure the prevalence and superiority of market forces within the Nigerian environment. Further recommended is intensified product development by participating institutions to enhance the level of intermediation in the Nigerian financial markets.

Keywords: Money Market, Capital Market, Causality, Market Forces.