The Nigerian Economy: A Macroeconometric and Input-Output Model

The Nigerian Economy: A Macroeconometric and Input-Output Model

The Nigerian Economy: A Macroeconometric and Input-Output Model

The Nigerian Economy: A Macroeconometric and Input-Output Model

Synopsis

This book combines descriptive, technical, empirical, policy evaluation, and forecasting methodologies to provide a systematic analysis of the the Nigerian economy. The author develops and tests an integrated macroeconomic input-output model of the economy's workings, using it to explain Nigeria's recent economic growth and development and to forecast the country's future growth prospects. The model also enables Oshikoya to provide a source of information on estimates of the structural parameters of the Nigerian economy; to evaluate the role of government policy in determining general levels of economic activity; to study the relationships among the major economic variables and the determinants of their magnitudes, composition, and rates of change over time; and to examine the impacts of such factors as fluctuations in the world petroleum market, technological change, and external debt accumulation on economic growth in Nigeria.

Excerpt

This book provides a systematic analysis of the Nigerian economy using a combination of descriptive, theoretical, empirical and forecasting methodologies. The analysis provides a basis for evaluation of Nigeria's economic growth and development. It studies the relationship among the major economic variables and the determinants of their magnitudes, composition and rates of change over time.

An integrated macroeconometric and input-output model of Nigeria is formulated in this book. Input-output table of Nigeria is combined with national income accounts, fiscal, monetary and balance of payments accounts to test the model. The integrated model provides a source of information on estimates of the structural parameters of the Nigerian economy. The 'predictive ability of the model is evaluated based on dynamic historical simulation results. Both impact and long run multiplier effects of changes in fiscal and monetary policy are derived from simulation experiments performed with the model.

The integrated model also facilitates a number of analytical possibilities since the macromodel of final demand is complemented by the intersectoral supply flows and the input-output model by the stochastic macroeconometric relationships. Simulations concentrate on the impacts of fluctuations in world petroleum market, shifts in final demand, intersectoral linkages, technological changes and external debt accumulation on the growth prospects for the Nigerian economy. Simulation results suggest that intersectoral allocation of investments is essential for the growth strategy for Nigeria. A higher priority for investment in agriculture stimulates long term increases in output. A relaxation of external debt constraints, especially one that combines debt service reduction and debt forgiveness with concessional lending for Nigeria could accelerate growth of investments and output in the long term.

The book aims to increase the understanding of the structure and important features of the Nigerian economy, and to be of assistance in the design, formulation, and evaluation of macroeconomic and sectoral policy initiatives, forecasting, and development planning.

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