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External Shocks And Business Cycle Fluctuations In Oil-Exporting Small Open Economies: The Case Of Nigeria, Sunday Oladunni
External Shocks And Business Cycle Fluctuations In Oil-Exporting Small Open Economies: The Case Of Nigeria, Sunday Oladunni
CBN Journal of Applied Statistics (JAS)
This study employs a sign-restricted Bayesian structural vector autoregressive (BSVAR) model to analyse how global demand, oil price and the US monetary policy shocks impact the Nigerian business cycle. The objective is to uncover the dominant external drivers of the business cycle in Nigeria. Results show that global demand and oil price shocks are the principal foreign drivers of the Nigerian business cycle. The global demand shock elicits the strongest responses from output growth and inflation; while oil price shock impacts the terms-of-trade and interest rate the most. The historical contributions of the global demand and oil price shocks to …