Abstract

The aim of this study is to examine the role of banks deposit money in the growth of Nigerian economy. The study was based on time series; data for the study were sourced from the Federal Bureau of Statistics, CBN statistical bulletin which covered 1974 to 2010. The co-integration and error correction model and structural analysis were used, both ADF and PP was adopted in testing for the unit root. At the end of our analysis, we discovered that there exist a long-run relationship between the dependent and the explanatory variables. The results conform to the economic a priori expectation. Thus, policies that tend to increase the gross domestic product through the financial sector such as increase in banks deposit liability, low interest rate, high liquidity ratio were recommended for better economy.

Key words: Deposit money bank, co-integration, economic growth, money supply.