Exploring the Nexus between Trinity Policy Hypothesis and Unemployment in Nigeria

This study used an ex-post facto research design to provide insights into the dynamic effects of trinity policy trade-offs on unemployment in Nigeria, which was motivated by the growing disagreement about the efficiency of the trinity policy goals in promoting socio-economic development. The impact of exchange rate stability, monetary autonomy, and capital mobility on unemployment was specifically investigated. The external reserve is included in the empirical model because of its importance in boosting the effectiveness of trinity policy objectives. The variables were created using data from the National Bureau of Statistics, the Central Bank of Nigeria's Statistical Bulletin, and the World Bank's World Development Indicators (WDI), among other sources. Data analysis is based on descriptive statistics, limits cointegration, and the ARDL model. The results of the unit root test show that the variables are mixed integrated. The application of the boundaries cointegration test is required in this case. The factors have a long-run relationship, as evidenced by the results. In the long run, cross-border capital mobility was found to be positively and significantly related to unemployment, whereas monetary autonomy was found to have a large negative impact on unemployment. Furthermore, changes in unemployment are statistically significant when the external reserve is considered. This conclusion explains why Nigerian policymakers have continued to place a premium on external resource accumulation for sterilised intervention and policy success. According to the findings, authorities should allow for financial integration, maintain consistency in monetary policy, and develop a strong external reserve in order to reduce unemployment.

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