Crude Oil Price Shocks And Selected Macroeconomic Variables In Nigeria
Tubotamuno Boma
Department of Economics, Faculty of Social Sciences, Rivers State University, Nkpolu- Oroworukwo, Port Harcourt
Ewubare Dennis Brown
Department of Economics, Faculty of Social Sciences, Rivers State University, Nkpolu- Oroworukwo, Port Harcourt
Keywords: Asymmetric, Crude Oil, Macroeconomic, Price, Shocks, Symmetric
Abstract
The study examined crude oil price shocks and selected macroeconomic variables in Nigeria from 1980-2019. The objectives of the study were to; analyze nature of shocks between crude oil price and gross domestic product in Nigeria; and determine the type of shocks between crude oil price and inflation rate in Nigeria. Annual data were collected from CBN statistical bulletins and World Development Index (WDI). The main technique of analysis is the Impulse Response Function (IRF). The technique of Augmented Dickey Fuller (ADF) unit root test was used to ascertain the order of integration of the variables before they were subjected to the IRF. The ADF result showed that all variables were stationary at first difference. The empirical results showed that, there is a symmetric shock between crude oil price and gross domestic product. But an asymmetric shock between crude oil price and inflation rate. Meaning that, there is positive response between crude oil prices and GDP, but a negative response between crude oil price and inflation rate. Based on the findings it was recommended amongst others that there is the need for proper coordination of fiscal and monetary policy for sustainability of macroeconomic variables in terms of inflation and real gross domestic product