Abstract
This research explores the impact of oil price shocks on the Nigerian economy from 1990 to 2021, focusing on Real Gross Domestic Product (RGDP), Exchange Rate (EXR), and Balance of Payments (BOP). Utilising a Vector Autoregressive (VAR) model, the study reveals a positive impact of oil price shocks on RGDP, indication economic expansion during global crude oil price and contraction during decline, such as observed in the 2015 recession. Variance decomposition analysis demonstrate the variability contributions of oil price, exchange rate, and BOP to RGDP, emphasizing the significant role of the oil sector in Nigeria’s economic dynamics Additionally, Granger Causality/Block Exogeneity Tests reveals the directional causality between oil price and the key variables, emphasizing their substantial role in shaping economic and trade dynamics. accelerated economic diversification, investment in other sectors beyond oil, fostering export-led growth, building foreign exchange reserves to reduce the economic vulnerability to fluctuation in global oil prices.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Developing and Emerging Economies
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
