Title: INTERACTION BETWEEN OIL PRICE SHOCKS AND NIGERIA'S NON-OIL MACROECONOMY
Abstract: Past Nigeria specific studies on oil price shocks-macroeconomy association had earlier discovered a significant real effective exchange rate appreciation, which is suggestive of the existence of “Dutch Disease” in Nigeria. As a result, this paper undertook a detailed investigation into oil price shocks-non-oil macroeconomy association, which it believes should be the first major step to solving the “Dutch Disease” problem in Nigeria. Analysis was conducted using linear and non-linear variants of oil price, employing the multivariate Vector Autoregressive (VAR) and Vector Error Correction (VEC ) models respectively. Results indicate that both measures of oil price account for remarkable changes in real exchange rates, and the transmission effects of these variations on non-oil export and import are both negative. On the bases of this, the paper recommend policies geared towards evolving realistic and stable exchange rates for the naira, to complement current efforts being made to diversify the economy in the direction of non-oil productions.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
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Cited By Count: 1
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