Acta Universitatis Danubius. Œconomica, Vol 14, No 7 (2018)

External Shocks and Economic Growth in Nigeria

Rasak Adetunji Adefabi, Mutiu Gbade Rasaki


The study investigates the effects of external shocks on economic growth dynamics in Nigeria. We employ structural vector autoregression (SVAR) technique. We consider six external shocks- external debt, foreign interest rate, foreign output, oil price, foreign input price and real interest rate shocks. Our findings indicate that external shocks impact economic growth in Nigeria. Among the external shocks, we find that foreign interest rate shocks, foreign input price shocks and external debt shocks are the most important shocks impacting economic growth in Nigeria. The importance of foreign interest rate shocks and foreign input price shocks suggest the significance of external financial shocks and foreign supply shocks on economic growth in Nigeria. The findings, however, show that oil price shocks, foreign output shocks and real exchange rate shocks have limited impact on economic growth in Nigeria.


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