Isolated Twin Model and Nigeria Economic Growth: Bridging Them Together with Corrective Measures in Less Developed Countries

Abstract

The isolated twin gap model has always been treated separately in all economy. We realized that the two-gap model exist simultaneously. They are either affecting an economy positively or inversely. This implies that most nation will either have the two gaps positively influencing the economy or inversely to the growth of the nation.  The graphical illustration shows that once a model is occurring in an economy, its impact influences the other model in the same direction. The ADF shows that all the variables are stationary at level 1[0] and one 1[1]. The ARDL shows there is short run relationship between the variables at 1% and 5%. The research work also shows that irrespective of revenue from the exportation of crude oil, backwardness of the economy highlights the inverse relationship between the twin model and the growth of the economy. Corruption couple with macroeconomic objective management affect less developed economic to block the wide gaps of the economy. For the economy to be save from the lower saving habit which results saving gaps and foreign exchange gap, the government activities in the economy should not be purely profit oriented.