[01] Ebiringa Oforegbunam Thaddeus, Department of Management Technology, Federal University of Technology, Owerri, Nigeria. [02] Duruibe Stanley Chigozie, Department of Management Technology, Federal University of Technology, Owerri, Nigeria.

This paper analyzed nature of relationship between financial system development and economic growth in Nigeria using vector autoregressive model. The objective to validate the hypothesis, which suggest that growth experienced by the money and capital markets has not translated to long run growth of the economy. The results reveal among others that long run causality does not run from financial system development indicators and economic growth, implying that financial system development seem not to significantly catalyse economic growth trends in Nigeria. However, in specific terms, the effect of financial system development on economic growth has been positively significant only in the short run. The paper concludes that for the financial market to adequately support short and long-term growth of the Nigerian economy, the financial system need further deepening through offering and delivery of innovative financial products and service by market operators, formulation and implementation of sound monetary policies and regulations.

Stock Market, Credit Market, Financial Deepening, Monetary Policy, Industrial Productivity

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