IMF Working Papers

Determinants of Inflation, Exchange Rate, and Output in Nigeria

By Louis Kuijs

November 1, 1998

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Louis Kuijs. Determinants of Inflation, Exchange Rate, and Output in Nigeria, (USA: International Monetary Fund, 1998) accessed September 27, 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

This paper presents a macroeconomic model of the Nigerian economy. The long-run relationships pertaining to the markets for money, foreign exchange, and (non-oil) output are estimated. Subsequently, dynamic equations are estimated for the price level, the real exchange rate, and output. The results are instrumental in explaining the dramatic developments on the foreign exchange market during 1983-86 and 1992-94, the secular depreciation of the real exchange rate since 1985, and the rise and fall of inflation during 1991-97. The methodology could usefully be applied to other economies whose exports are insensitive to exchange rate movements (e.g., other oil-based economies).

Subject: Exchange rates, Foreign exchange, Monetary base, Money, Potential output, Production, Real exchange rates

Keywords: AFEM exchange rate, Africa, Co-integration, Constant returns to scale, Excess demand, Exchange rate, Exchange rate movement, Exchange rates, GDP deflator, Inflation, Monetary base, Monetary policy, Money demand function, Money supply, Nigeria, Nominal exchange rate, Oil GDP, Output, Output gap, Overvalued exchange rate, Potential output, Price level, Price level result, Production function, Real exchange rates, Sub-Saharan Africa, WP

Publication Details

  • Pages:

    33

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1998/160

  • Stock No:

    WPIEA1601998

  • ISBN:

    9781451981735

  • ISSN:

    1018-5941

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