ABSTRACT
This study conducted an empirical investigation into the impact of migrant remittances on aggregate demand in Nigeria, covering the period from 1990 to 2020. The key variables examined included Exchange rate (EXCR), Migrant remittances (MGR), Population growth rate (PGR), Interest rate (INTR), and Real gross domestic product (RGDP).
The findings revealed several crucial insights. Firstly, there exists a positive but statistically insignificant relationship between the exchange rate (lnEXCR) and consumption (LnCON). This implies that while a correlation between exchange rate and consumption exists, it's not a significant predictor of consumption behavior.
Surprisingly, migrant remittances were found to have a negative impact on consumption, with a 1% increase in remittances corresponding to a 0.0715% decrease in consumption. This counterintuitive relationship warrants further investigation to understand its underlying factors.
Furthermore, a positive and statistically significant relationship was observed between population growth rate and consumption. A growing population appears to drive increased consumer demand, aligning with expectations.
The analysis also highlighted a positive relationship between RGDP and consumption, indicating that economic growth stimulates consumption. This underscores the importance of policies supporting sustainable economic growth in Nigeria.
On the investment front, the analysis found a negative but statistically insignificant relationship between interest rates (lnINTR) and investment (LnINV). However, migrant remittances were positively associated with investment, suggesting their role in driving investment in Nigeria.
