Abstract
The Nigerian government’s substantial reduction of fuel subsidy in January 2012 brought about shocks in some macroeconomic indicators. This paper examines the effect of the change in pump price of fuel on exchange rate, inflation and money supply. We developed an analytical model and the main variable that reflects the policy change is the pump price of fuel. Data was sourced from the Central Bank of Nigeria website-monthly data on macroeconomic indicators from January 2009 to December 2012. Chow test for structural break and the Vector Autoregressive impulse response was used as tools for the estimations. We find a break point in the trend of the selected macroeconomic variables. Our findings have some policy implications which include the need for the government to consider timing when taking policy actions.
Sign-in/Register to access full text options 
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 callDisclaimer: 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.
