ASYMMETRIC EFFECTS OF OIL PRICE AND EXCHANGE RATE ON TRADE BALANCE IN NIGERIA: A NONLINEAR ARDL APPROACH
- Oliver E. Ogbonna
- ( paper pages. 40-71 )
Abstract
Little is known on
the asymmetric effects of oil prices and exchange rate on the trade balance in
Nigeria. This paper therefore, examined whether Nigeria’s trade balance is
responding asymmetrically to changes in oil price and exchange rate using the
nonlinear autoregressive distributed lag model with monthly time series data for
the period 1999M1 to 2019M12. The study found that Nigeria’s trade balance
significantly responded asymmetrically to changes in oil price, such
that the effect of rising oil price is more pronounced. In addition, the
study found that Nigeria’s trade balance significantly responded asymmetrically
to changes in exchange rate, such that the significant negative effect of
depreciation was more prominent. Moreover, the study found no evidence of the
J-curve effect in Nigeria. This research has significant policy implications
for policymakers in Nigeria.
Citation
Oliver E. Ogbonna.
2023.
"ASYMMETRIC EFFECTS OF OIL PRICE AND EXCHANGE RATE ON TRADE BALANCE IN NIGERIA: A NONLINEAR ARDL APPROACH"
The Nigerian Journal of Economic and Social Studies,
65 (1): 40-71.
JEL Classification
C22, F31, Q43, F14, F41
