Affiliation:
1. Bayero University, Kano, Nigeria
Abstract
The chapter analyses factors that influence exchange rate in Nigeria during the period of democracy by using generalized method of moments (GMM) and Granger causality tests for analyses. The democratic system of governance is associated with reduction in arbitrariness, policy continuity, protection of property rights, human rights, freedom, free market, community development, consensus, and human development. The results of the analysis show that GDP growth and FDI have long-run inverse relationships with foreign exchange while export and consumption have long-run positive relationships with foreign exchange.
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