Does Volatility in Crude Oil Price Precipitate Macroeconomic Performance in Nigeria?

Joseph Omojolaibi

International Journal of Energy Economics and Policy, 2013, vol. 3, issue 2, 143-152

Abstract: This study examines the effects of crude oil price changes on economic activity in an oil dependent economy-Nigeria. A small open economy structural vector autoregressive (SVAR) technique is employed to study the macroeconomic dynamics of domestic price level, economic output, money supply and oil price in Nigeria. The sample covers the data from 1985:q1 to 2010:q4. The Impulse Response Functions (IRFs) and the Forecast Error Variance Decompositions (FEVDs) results suggest that domestic policies, instead of oil-boom should be blamed for inflation. Also, oil price variations are driven mostly by oil shocks, however, domestic shocks are responsible for a reasonable portion of oil price variations.

Keywords: Oil price; Monetary policy; Fiscal policy; Inflation; Nigeria (search for similar items in EconPapers)
JEL-codes: E31 E52 E62 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2013-02-4

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