Do Trading Partners Still Matter for Nigeria's Growth? A Contribution to the Debateon Decoupling and Spillovers

October 1, 2009

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Format: Chicago

Kingsley I. Obiora Do Trading Partners Still Matter for Nigeria's Growth? A Contribution to the Debateon Decoupling and Spillovers, (USA: International Monetary Fund, 2009) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Should policymakers still be concerned about economic growth in trading partners? Have developing and emerging market countries decoupled from the US enough to grow despite significant recession in the US? Using VAR models, this paper addresses these questions for Nigeria in the context of the global crisis. The results seem to debunk the "decoupling theory" and suggest there are still significant spillovers from Nigeria's main trading partners, including the US, with trade and commodity price linkages being the dominant transmission channels. Given the sharp fall in both trade financing and commodity prices in aftermath of the crisis, these results provide some explanation to the realization of adverse second-round effects in Nigeria.

Subject: Econometric analysis, Emerging and frontier financial markets, Exchange rates, Financial markets, Financial sector policy and analysis, Foreign exchange, Oil prices, Prices, Spillovers, Vector autoregression

Keywords: Decoupling, Emerging and frontier financial markets, Exchange rates, Export commodity, Global, Net export, Nigeria, Nigeria GDP, Nigeria inflation, Oil price growth, Oil prices, Spillovers, Trade openness, Trade partner, Trading Partners, Vector Autoregression, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/218
Stock No:

WPIEA2009218
ISBN:

9781451873658
ISSN:

1018-5941

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