JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 3406 ECONOMIC VOLATILITY, MONEY SUPPLY VELOCITY AND ECONOMIC GROWTH IN NIGERIA Atseye Fidelis Anake 1 , Helen Walter Mboto 2 , Eyo Itam Eyo 3 , Anthony Ogar 4 , Takon Samuel Manyo 5 , John Ugah 6 1 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria 2 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria 3 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria 4 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria 5 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria 6 Department of Banking & Finance, University of Calabar, P.M.B. 1115 Calabar, Nigeria Received: 14 March 2020 Revised and Accepted: 8 July 2020 ABSTRACT The paper empirically examined economic volatility (PSC/GDP), money supply velocity (BMS/GDP), and economic growth in Nigeria for the period 1990 - 2016. The paper was anchored in the finance- growth conflicting theories of supply-leading and demand-leading hypotheses, and supported by the financial liberalization theory. Ordinary least square (OLS) multiple regression technique was employed to analyze time- series data collated from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) statistical bulletins. The study utilized the Augmented-Dickey-Fuller (ADF) pre-estimation technique in testing for the presence of unit root. Results indicated that economic volatility, broad money velocity, and real interest rate jointly increased the real gross domestic product (rGDP) in Nigeria. Specifically, broad money supply velocity and real GDP increased proportionately. However, economic volatility and real interest rate grew disproportionately with real gross domestic product. Given these outcomes, the paper suggested, in addition to other things, a powerful fiscal strategy by the monetary authorities, incorporating a reduction in the real interest rate and interest payment on short term securities in the monetary market; and financial liberalization to sustain money supply over the economy. The forgoing recommendation would encourage real investment to stimulate economic growth and development in Nigeria. KEYWORDS: Economic Volatility, Money Supply Velocity, Economic Growth. 1.0. INTRODUCTION A robust financial system guarantees adequate liquidity, smooth financial intermediation, and free-flow of funds across the macroeconomic economy. The financial system refers to the presence of financial intermediaries, markets, instruments, rules, and regulations, norms, and conventions that facilitate the flow of funds for investments, purchase of economic goods and services, and increase the volume of savings for future consumption opportunities. Peter and Milton (2006) described the financial system as a combination of markets, institutions, laws, regulations, and techniques through which securities such as bonds and stocks are traded, interest rates determined, and financial services delivered across the globe. The process of ensuring that funds are transferred from surplus saving units (savers) to deficit savings units (borrowers) to promote economic growth is often referred to as financial intermediation. Development finance experts believe that financial deepening involves mobilizing savings, managing liquidity, and mediating between savers and borrowers. Financial deepening is utilized reciprocally with financial depth to describe the limit of the financial system to activate savings, create wealth by increasing the value of benefits held after some time, and giving liquidity by changing securities into cash without misfortunes in their assumed estimations. Financial deepening also describes providing credit to finance consumption and investment expenditures, paying for electronic platforms and risk protection to consumers and government agents against risks arising from life, health, property, and income misfortunes. Researchers argue that there is a two-dimensional causality running from financial deepening to economic growth. While financial depth supports economic growth, economic growth, in turn, provides a foundation for financial sector growth (Ghildiyal, Pokhriyal & Mohan, 2015). The pioneering work of Schumpeter (1911) asserted that financial sector growth stimulates technological innovations and economic growth through the provision of financial services and resources to entrepreneurs for the implementation of innovative products and processes. The consensus among scholars and researchers is that a developed financial system is a catalyst for economic growth and development. See, for instance, Odhiambo (2011), Okafor, Onwumere, and Chijindu