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Full-Text Articles in Social and Behavioral Sciences
Purchasing Power Parity And Exchange Rate In Nigeria: A Regime Switching Approach., M. C. Ononugbo
Purchasing Power Parity And Exchange Rate In Nigeria: A Regime Switching Approach., M. C. Ononugbo
Economic and Financial Review
This study basically extends the work of Obaseki (1998) by including an additional variable to capture the impact of changes in exchange rate regime. The paper undertakes an empirical examination of the long-run co-movement in naira exchange rate and relative price levels of Nigeria and USA. The impact of the policy swap from a system of exchange rate control to a market based system (captured by a dummy variable) is investigated using an error correction model. The outcome reveals the applicability of the PPP using Nigerian data. From the analysis, the prevailing nominal exchange rate during the period closely approximates …