Money and Economic Activity in Developing Countries: Evidence Based on Cointegration and Causality Tests

Owoye, Oluwole

doi:10.1177/056943459704100108

Cited by 6 publications

(3 citation statements)

References 21 publications

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“…The impact of the oil sector on the economy of Nigeria has been researched by such financial economists as Aiyegoro (1997), Umoh (1995), Ayadi (1997), Forrest (1995), Khan (1994), Okolie (1995), Omotoye (1997), Owoye (1997) and Soremekun and Obi (1993). Soremekun and Obi conclude that the emergence of oil as a monocultural base of the Nigerian economy has magnified the contradictions that existed in the economy.…”

Section: An Overview Of the Nigerian Oil Sectormentioning

confidence: 99%

A Vector Autoregressive Analysis Of An Oil‐Dependent Emerging Economy — Nigeria

2000

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This paper models the interrelationship among a variety of macroeconomic variables representing the financial, as well as the energy, sectors of the Nigerian economy from 1975 through 1994. The attempt is to investigate the impact of the energy sector on the functioning of the Nigerian economy, including the financial markets. The investigation is explored within a vector autoregressive (VAR) system. The results reveal that the energy sector exerts a significant influence on the Nigerian economy by acting as a prime mover. More importantly, Nigeria seems to find itself in a vicious circle, because of its inability to exercise control over the price of its main export and its imports. Thus, the strength and autonomy exhibited by Nigerias macroeconomic managers during the oil boom era appears to have been barren.

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Section: An Overview Of the Nigerian Oil Sectormentioning

confidence: 99%

A Vector Autoregressive Analysis Of An Oil‐Dependent Emerging Economy — Nigeria

2000

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“…In a similar analogy, Demetriades and Luintel (1997), Fry (1997), King and Levine (1993), Omole and Falokun (1999), Owoye (1997), Ikhide and Alawode (2001), Levine (1997), Claessens and Klingebiel (2001), Gruben et al (2002), Chete (2001), Cho (1986), Reinhart and Tokatlidis (2001), Soyibo (1997) and Gruben and McComb (1999) among other financial researchers, agree that financial repression inhibits financial deepening by depressing real rates of interest. As Demetriades and Luintel (1997) argue that deficiency of financial saving is associated with rationing of credit in developing countries to priority sectors.…”

Section: Financial Repression and Economic Growthmentioning

confidence: 85%

Financial liberalization and price rigidity in the Nigerian banking system

Ayadi

Hyman

2006

Managerial Finance

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Purpose -Many developing countries embarked on a program of financial liberalization in order to maximize the benefits associated with a free market system. The preponderance of the evidence in the financial economics literature is that market-determined interest rates become volatile subsequent to financial liberalization. This paper aims to examine the liberalization program in Nigeria with a view to finding out whether the level of banking competition is increased after financial liberalization. Design/methodology/approach -The test of banking competition is premised on the argument by Hannan and Berger that retail interest rate rigidity results from either market concentration or the size of the customer base. The cointegration and error correction models are applied to quarterly wholesale and retail interest rates from 1987 through 2001, in order to analyze their long-run as well as short-run dynamics. Findings -The retail lending and deposit rates possess a long-run equilibrium relationship. Moreover, the minimum rediscount (wholesale) rate (MRR) and the deposit rate also exhibit a longrun equilibrium relationship. If the lending and deposit rates diverge from their long-run equilibrium relationship, 37 per cent of the disequilibrium is corrected each quarter by changes in the lending rate. On the other hand, any disequilibrium in the long-run relationship between the deposit and MRRs can be corrected by changes in the MRR at about 58 per cent per quarter. Originality/value -The results imply that the financial liberalization in Nigeria failed to achieve its key objective of a market-driven interest rate system.

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“…Demetriades and Luintel (1997), Fry (1997), King and Levine (1993), Omole and Falokun (1999), Owoye (1997), Ikhide and Alawode (2001), Levine (1997), Claessens and Klingebiel (2001), Adebiyi (2002), Ayadi (1996), Chete (2001), Oyewole (1994), Reinhart and Tokatlidis (2001) and Gruben and McComb (1999) among other financial researchers, agree that financial repression inhibits financial deepening by depressing real rates of interest. Demetriades and Luintel (1997) argue that deficiency of financial saving is associated with rationing of credit in favor of priority sectors in developing countries.…”

Section: Literature Reviewmentioning

confidence: 98%

Relative potency of financial repression and liberalization on financial development and economic growth: An empirical survey

Okpara¹

2010

AJSIR

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This paper assessed the relative potency of financial repression and liberalization in Nigeria. The relative effect of financial development on economic growth during these two policy periods was considered using multiple regression analysis which was tested and proved not to be spurious. Furthermore, the paired comparison test was employed to determine whether financial liberalization causes observed improvement in the growth of the economy. The results reveal that financial development during the period of financial liberalization significantly impact more on the growth variable (GDP). Also, the paired comparison test shows that financial liberalization causes observed improvement in the growth of the economy and the well measured financial development. The banking system however is noted to be bedecked with crisis. The researcher therefore recommends that putting in place financial superstructure should precede the adoption of financial liberalization in order to reap the best thereof.

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Money and Economic Activity in Developing Countries: Evidence Based on Cointegration and Causality Tests

Abstract: This paper examineswhether or not the fluctuations

Cited by 6 publications

References 21 publications

A Vector Autoregressive Analysis Of An Oil‐Dependent Emerging Economy — Nigeria

A Vector Autoregressive Analysis Of An Oil‐Dependent Emerging Economy — Nigeria

Financial liberalization and price rigidity in the Nigerian banking system

Relative potency of financial repression and liberalization on financial development and economic growth: An empirical survey

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