Global Journal of Human Social Science, E: Economics, Volume 22 Issue 2

Lucas (1988) presents a growth model in which output is generated via a production function of the form Y = AK α (uhL) 1−α (3.1.1) Where: Y =output, A = growth of knowledge, K = capital and L = labor the variables are usually defined as 0< α < 1.The variable u is defined as the proportion of total labor time spent working, and h is what Lucas calls the stock of ‘human capital.’ The production function can be rewritten in per- capita terms as y = Ak α (uk) 1−α (3.1.2) Which is a constant return to scale production function in k and uh. Capital accumulation proceeds via the usual differential equation, k̇ = y − c − (ξ + δ)k, (3.1.3) While h accumulates according to ḣ = ∅h(1 − u) (3.1.4) ḣ h = ∅(1 − u). ⁄ (3.1.5) b) Model Specification MANQ = α 0 + α 1 KS + α 2 LF + α 3 H + α 4 OPN + α 5 RER + α 6 FDI + α 7 DD + α 8 TR +Ut--------------------------------- (3.2.1) Log-Linear Model: LNMANQ = β 0 + β 1 LNDD + β 2 LNLF + β 3 LH + β 4 LNOPN + β 5 LNRER + β 6 LNFDI + β 7 LNTR + Ut ----------------------------------- (3.2.2) Where: LNMP = Natural Log of Manufacturing sector Performance LNKS = Natural Log of Capital Stock LNLF = Natural Log of Labor Force LNOPN = Natural Log of Openness of the Economy LNRER = Natural Log of Real Exchange Rate LNFDI = Natural Log of Foreign Direct Investment LNDD = Natural Log of Dutch Disease LNTR = Natural Log of Tariff LNH = Natural log of Human capital LNMANQ = Natural Log of Manufacturing Output Index IV. D ata P resentatoion and A nalysis MODEL (I) - SHORT-RUN ANALYSIS a) Parsimonous Error Correction (ECM) Table 5.1: MODEL 1: Short-Run Mp with Error-Correction (ECM) Dependent Variable: D(MP) Method: Least Squares Sample (adjusted): 1980- 2010 Included observations: 30 after adjustments Variable Coefficient Std. Error t-Statistic Prob. C -106770.7 254567.8 -0.419419 0.6794 D(KS) 4.680403 0.637210 7.345150 0.0000 D(LF) 0.101331 0.196101 0.516727 0.6110 D(H) 0.030616 0.032745 0.934977 0.3610 D(OPN) -4392.241 7244.523 -0.606284 0.5511 D(RER) -3726.805 12911.62 -0.288640 0.7758 D(FDI) 1.692060 0.908081 1.863337 0.0772 © 2022 Global Journals Volume XXII Issue II Version I 75 ( ) Global Journal of Human Social Science - Year 2022 E Impact of Trade Liberalization on the Nigerian Manufacturing Sector