LONG RUN RELATIONSHIP BETWEEN OIL PRICE SHOCKS, EXCHANGE RATE VOLATILITY AND ECONOMIC GROWTH IN NIGERIA

The paper examined the long run relationship between oil price shock, exchange rate volatility and economic growth in Nigeria over the period 1980-2019. The study employed the Johansen Vector Autoregression (VAR)-based cointegration technique model to examine the sensitivity of real economic growth to changes in oil prices and real exchange rate volatility in the long-run while the short run dynamics was checked using a vector error correction model. The result from the Granger causality test suggests that there is causality between oil price, exchange rate and GDP. The results from Johansen cointegration test indicate there exist a long-run equilibrium relationship among the variables. Findings further show that oil price shock and appreciation in the level of exchange rate exert positive impact on real economic growth in Nigeria. The paper therefore recommends greater diversification of the economy through investment in key productive sectors of the economy using income from the crude oil export to guard against the vicissitude of oil price shock and exchange rate volatility.

Frustration in Oil Market Price Effect on External Reserves in Nigeria 1970-2017

This study examines frustration in oil market price shock effect on external reserves Nigeria 1970-2019. Objectives are; to examine frustration in oil market price shock on the Nigerian external reserves 1970 to 2019 and to ascertain the impact of frustration in oil price on the Nigerian external reserves. The study employed the following advanced econometric techniques; Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests, Structural VAR approach, Choleski decomposition and Imposing Short-run Restrictions test, statistical tests & Co-integration test. Based on the above econometric techniques conducted, it was observed that all the variables used became stationary after the first differences at degree of order one I (I). There is Co-integration (long run relations) among variables used in the study. Our results indicated that oil price does significantly influence shocks on external reserves in Nigeria the period of the study. Furthermore, frustration in oil price does insignificantly have impact on the external reserves in Nigeria from 1970 to 2019. The researcher recommends that; less emphasis of control should be placed on international market oil price since the oil price has 81% influences of international market externalities ‘shock on Nigeria external reserves. Rather, more emphasis should be place on other non-oil sector contributions to Nigeria external reserves since it may has virtually neutral or significant internal control that could lend to positive effect on external reserves in Nigeria. Direct manipulation of cured oil production and supply control policy should be Nigeria interest since Nigeria economy operates system of floating exchange rates

Oil price shock in the US and the euro area – evidence from the shadow rate and the term premium

The aim of this article is to investigate the consequences of oil price changes for the economy of the US and the euro area. Oil price transmission channel is assessed using Granger causalities and structural vector autoregressive (VAR) specifications (applying the Cholesky factorization and the restrictions following the method of Blanchard and Quah). The conventional oil price transmission channel is extended by a shadow policy rate and term premium, as the importance of both indicators has been growing rapidly in recent years. The results confirm that the oil price shock is not negligible in the aftermath of the Global Financial Crisis and in the subsequent period of monetary policy normalization. The findings are confirmed by the outcomes of the Bayesian VAR specification with sign restrictions. The consequences of changes in oil prices have significantly grown since the introduction of unconventional monetary instruments. The magnitude of the response of industrial production, price level and shadow interest rate to the oil price shock is strongest in the period corresponding to the unconventional monetary policy. In many cases, however, the reaction is short-lived. The conventional instrument (policy rate) in the euro area has still not been sufficient to stabilize the economy in the recent period of monetary policy normalization in the US.

South Sudan may struggle to attract oil investment

Significance Crude oil is central to South Sudan’s economy, providing between 80% and 90% of government revenue and almost all export earnings. Last year’s oil price shock hit the economy hard and prompted two disbursements by the IMF under the Rapid Credit Facility (RCF) in November 2020 and April 2021. Impacts Net foreign direct investment (FDI) will turn positive in fiscal year (FY) 2020/21, following three years of outflows. The central bank’s weekly foreign exchange auctions will continue to reduce the gap between the official and parallel market rates. Following a contraction of around 4%, GDP is expected to grow modestly at 2-3% in FY 2021/22 and FY 2022/23.

Crude Oil Price Shock and the Nigerian Stock Market Performance in the Face of Covid-19 Pandemic Evidence from ARDL & Granger Causality Approach

The study examined empirically the linear relationship between crude oil price shock and the Nigerian stock market performance, with the main objective of ascertaining the impact of the recent sharp decline in crude oil prices on stock market performance in the face of the global socio-economic challenge posed by COVID-19 pandemic. It used monthly time series data from the central bank of Nigeria (CBN) website (www.cbn.gov.ng) from 2017-2020 This period was chosen to capture the effects of changes in oil price on the performance of the Nigerian stock market within the context of the global economic challenges due to the COVID-19 pandemic. The auto-regressive distributed lag ARDL approach has been applied in the model specification and data analysis for the study. The results of the ARDL in both the short and long run revealed that the recent crude oil price shock has a significant impact on stock market performance in Nigeria. The results of the granger causality test also reveal a unidirectional causality from crude oil price to stock market performance with a piece of evidence from the current decline of global crude oil prices from December 2019 to April 2020. The study, therefore, suggests the need for the Nigerian capital market to continue to pursue with vigor the implementation of the capital market master plan in the hope that a more developed capital market should be able to absorb external shocks such as those arising from crude oil price fluctuations.

Oil and Mortality

This paper investigates the impacts of a large and exogenous oil price shock in December 1973 on mortality rates of the major oil producer nations of the Middle East and North Africa. We use longitudinal data from 1960 to 2014 and we apply the difference-in-differences approach to investigate the main question of the research. Our findings show that the oil price shock did not lead to higher GDP per capita, but it did lead to lower mortality. These findings are puzzling. A possible explanation is that the oil price shock allowed for higher spending on publicly funded health care. We find a positive impact of the oil price increase on the number of hospital beds which perhaps suggests that higher oil revenues increased spending on public health and that possibly decreased mortality.

The Effect of Oil Price Shock and Inflation on Stock Returns: A Comparative Study on ASEAN-3

This study aims to examine the effect of the WTI type oil price shock and inflation on stock returns from the ASEAN-3 capital markets, namely Indonesia, Thailand, and Philippines. The data used are monthly data from 2015 to 2019. The data analysis technique used is multiple linear regression. The results showed that oil price shocks had a significant positive effect on stock returns on the JASICA Mining index and the SET Resources index, but had no significant effect on the PSE Mining and Oil index. Furthermore, inflation had a significant positive effect on stock returns of Indonesia seen from the JASICA Mining index. Whereas, inflation had no significant effect on the SET Resources index of Thailand and the PSE Mining and Oil stock index of Philippines. Keywords: Oil price shock, Inflation, Stock return

Oil and Mortality

This paper investigates the impacts of a large and exogenous oil price shock in December 1973 on mortality rates of the major oil producer nations of the Middle East and North Africa. We use longitudinal data from 1960 to 2014 and we apply the difference-in-differences approach to investigate the main question of the research. Our findings show that the oil price shock did not lead to higher GDP per capita, but it did lead to lower mortality. These findings are puzzling. A possible explanation is that the oil price shock allowed for higher spending on publicly funded health care. We find a positive impact of the oil price increase on the number of hospital beds which perhaps suggests that higher oil revenues increased spending on public health and that possibly decreased mortality.