TRADE LIBERALIZATION, SHOCKS AND ECONOMIC GROWTH IN NIGERIA

Mohammed Nuhu; Olabisi Julius Olaposi

Mohammed Nuhu University of Benin, Benin City.
Olabisi Julius Olaposi UNIVERSITY OF JOS- NIGERIA.

Resumo

The motivation for this study is to find the impact of trade openness, shock emanating from the economic growth of Nigeria. The vector autoregressive (VAR) methodology was applied to analyse the data collected from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1961 -2014. The results show that the causality tests confirm the fact that exchange rate, inflation rate, trade openness, manufacturing output, and the size of public sector all have carnal relationship with output growth. Similarly, trade openness, inflation and the manufacturing output significantly affect the exchange rate; it was also observed that only the size of the public sector causes the inflation to change. While the shocks from inflation do not influence the output growth, shocks from exchange rate affect output growth seriously. Also, shocks from trade openness affects the output growth significantly, implying that volume of international trade significantly affect output of Nigeria. It is recommended that monetary authority should watch closely at the movement of price level so as to avoid its rapid movement, 'gyrations in exchange rates have the capacity to harm the economy and should be avoided by the monetary authority. Finally, since manufacturing sector is the hub of Nigerian economy, every effort should be geared to boosting the sector. The conclusion drawn from this study is that trade is also an important sector that should grow Nigerian economy and should attract serious attention.

Biografias Autor

Mohammed Nuhu, University of Benin, Benin City.

Department of Economics and Statistics,

Olabisi Julius Olaposi, UNIVERSITY OF JOS- NIGERIA.

Department of Economics

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