0704-883-0675     |      dataprojectng@gmail.com

AN ANALYSIS OF THE RELATIONSHIP BETWEEN REAL EXCHANGE RATE AND DOMESTIC CONSUMPTION IN NIGERIA (1981-2016)

  • Project Research
  • 1-5 Chapters
  • Abstract : Available
  • Table of Content: Available
  • Reference Style: APA
  • Recommended for : Student Researchers
  • NGN 5000

ABSTRACT

This study analyses the real exchange rate-domestic consumption relationship in Nigeria using the Smooth Transition Autoregressive (STAR) model from 1981 to 2016. Findings shows that domestic consumption determines the regime shift in real exchange rate suggesting a nonlinear linkage ofreal exchange rate and domestic consumption with clearly distinct regimes. Exchange rate is shown to have significant linear effect from previous exchange rate. On the other hand, current foreign consumption is positive but has no significant impact on the exchange rate in the linear part of the model. In the nonlinear part of the model, we found evidence of a significant negative relationship between real exchange rate and domestic consumption, thus supporting the proposition by standard International Real Business Cycle (IRBC) Model. In the face of the wide disparity in literature trying to establish the prediction of IRBC model, we found evidence of bi-directional nonlinear granger causality between real exchange rate and domestic consumption. The study concludes that the relationship between real exchange rate and domestic consumption is indeed nonlinear and that fiscal and monetary authorities should develop policies that will help strengthen domestic production to further reduce import component in domestic consumption.




FIND OTHER RELATED TOPICS


Related Project Materials

An investigation of etymological origins of Yoruba proverbs in Abeokuta

Background of the Study
Yoruba proverbs are integral to the cultural heritage of Abeokuta, encapsulating wisdom, values, a...

Read more
The Impact of Disease Outbreaks on Tourism Resilience in Jos, Plateau State

Background of the Study

Disease outbreaks pose significant threats to the tourism industry, affecting tourist arrivals,...

Read more
A study of mobile advertising optimization on campaign efficiency: Evidence from a retail mobile app in Port Harcourt, Nigeria

Background of the study

Mobile advertising optimization has emerged as a crucial factor in enhancing campaign efficiency...

Read more
FINANCIAL RISK MANAGEMENT ON COOPERATIVE CREDIT SOCIETY’S WEALTH MAXIMIZATION IN NIGERIA: MODERATING ROLE OF RISK COMMITTEE SIZE

ABSTRACT

Risks are fundamentally a part of business operational models. They cannot be completely eliminated and, if not efficiently mana...

Read more
The Role of Traditional Diets in Diabetes Prevention in Taraba State

Background of the Study
Diabetes mellitus, particularly type 2 diabetes, has become a major global health...

Read more
THE APPLICATION OF LINEAR PROGRAMMING IN PROFIT MAXIMIZATION

Background of the study

Every company or organization in the world strives to find the most efficient m...

Read more
AN ANALYSIS OF REGULATORY REGIMES FOR THE TAXATION OF ELECTRONIC COMMERCE IN NIGERIA

ABSTRACT

No doubt, the advent of Information and Communication Technology (ICT) has greatly impacted human interaction ranging from polit...

Read more
An Empirical Study of Strategic Flexibility and Its Impact on Business Resilience: A Case Study of SMEs in Kano State

Background of the Study

Strategic flexibility refers to an organization's ability...

Read more
The effect of digital technology on transforming Nigeria’s financial sector: Evidence from mobile banking adoption in Abuja (2010–2020).

Background of the study:
Digital technology has profoundly transformed the financial landscape, and mobile...

Read more
An Assessment of the Prevalence and Management of Hypertension Among Elderly Patients in Bauchi State

Background of the Study

Hypertension, also known as high blood pressure, is a common c...

Read more
Share this page with your friends




whatsapp