STOCK MARKET PRICE VOLATILITY AND NIGERIAN ECONOMIC GROWTH: A GRANGER CAUSALITY MODELLING

This research investigated the unpredictability of stock market prices, their functioning, and their influence on economic growth in Nigeria, utilizing time series data from 2001 to 2023. The study employed Granger causality modeling to analyze the direction of relationships among the variables. The Augmented Dickey-Fuller test was used to assess the stationarity of the data, and error correction modeling was employed. Findings indicate that stock prices quickly adjust to variations in interest rates, inflation rates, exchange rates, broad money supply, gross domestic product, market capitalization, and trading volume on the Nigerian stock exchange. The lagged value of the error correction model measures at 23.9%, suggesting a correction or adjustment of 23.9% from the previous period's disequilibrium in the current stock price in determining causality between past stock prices and the present as well as past levels of explanatory variables. The study concluded that stock market activities are statistically significant in relation to stock prices and economic growth, recommending close monitoring of stock prices to mitigate volatility that could negatively impact stock market performance