Economics
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Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A.This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. AThis paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.Item Empirical Exposition of Monetary Policy under Fixed and Managed Float Exchange Rate Regime: Any Lesson for Nigeria(Central bank of Nigeria, 2014) Egwaikhide, F. O.; Oyinlola, M. A.; Adeniyi, O. A.; Olanipekun, D. B.This paper empirically investigated the relationship between monetary aggregates and the exchange rate under alternative exchange rate regimes in Nigeria. Using data spanning 1961 to 2013 to estimate vector auto-regressive (VAR) models, a number of findings ensued. One, the impulse response functions (IRFS) showed that monetary aggregates were responsive to exchange rate shocks. However, this effect was found to be closely linked with the underlying exchange rate regime. Two, the variance decompositions (VDs) indicated that exchange rate shocks had no significant weight as there was no impact recorded on inflation, interest rate and money supply after one year under the fixed regime. Third, the corresponding VDs under the flexible regime showed that the effect of exchange rate on the monetary aggregates was more significant, especially in the long-run. A key policy implication of the foregoing results was that domestic economic management policies should be proactively orchestrated to better align the objectives of exchange rate policy with broader macroeconomic goals.Item Impact of Oil Price Shocks on the Macroeconomy: Evidence from Nigeria.(West African Institute for Financial and Economic Management (WAIFEM),, 2014) Adeniyi, O. A.; Egwaikhide, F. O.; Oyinlola, M. A.The role of oil price shocks in the movements of key macroeconomic fundamentals such as output and inflation has been the focal point of many empirical enquiries. However, earlier studies on the oil price- output-inflation relationship in Nigeria hardly took an explicit account of potential non-linearities. This study, therefore, investigated the impact of oil price shocks on output and inflation in Nigeria between 1970 and 2006. A macroeconometric model which captured both the direct and indirect relationships between oil price shocks, output and inflation, was employed. Three alternative measures of oil price shocks namely linear, asymmetric and volatility were considered. The behavioural equations were estimated using the three-stage-least-squares technique and a general-to specific procedure was used to minimise the loss of valuable information. The linear benchmark model showed that the effect of oil price shocks on inflation was moderately important, while the effect on output was not significant. Specifically, in response to a doubling of oil price, output rose by 0.20% and it resulted in a 0.25% decline in inflation. The results of the asymmetric model indicated that a 100% increase in oil price would cause output to rise by 0.57%, but it would decline by only 0.13% following an oil price reduction of the same order of magnitude. The volatility measure showed that doubling the oil price would raise output by 0.45% and inflation would increase by 0.15%. The estimated results suggested that oil price shocks had trifling impact on output, while it appeared to have slight effect on inflation. This implied that the enclave nature of the oil sector and its weak linkages with the rest of the economy as well as better management via sterilisation may have moderated the effect of oil price shocks on both output and inflation respectively.Item Saving-Investment Nexus in Developing Countries: Does Financial Development Matter?(Emerald Publishing Limited, 2013) Adeniyi, O. A.; Egwaikhide, F. O.The Feldstein-Horioka puzzle is re-examined using a sample of 20 sub-Saharan Africa (SSA) countries. Unlike the extant literature we demonstrate the expediency of sustenance of financial sector reforms for the saving-investment nexus in SSA. Findings showed saving retention coefficients similar in magnitude to those already reported for developing countries, particularly SSA. In addition, however, the results uncovered a telling intervening role for financial deepening in the saving-investment space. Going forward, the precise nature and corresponding policy implications of this role should form an integral part of discussions in both academic and policy circles.Item Foreign Direct Investment, Economic Growth and Financial Sector Development in Small Open Developing Economies(Elsevier B. V., 2012) Adeniyi, O. A.; Omisakin, O.; Egwaikhide, F. O.; Oyinlola, M. A.The present paper examines the causal linkage between foreign direct investment (FDI) and economic growth - in Cote d'Ivoire, Gambia, Ghana, Nigeria and Sierra Leone - with financial development accounted for over the period 1970-2005 within a trivariate framework which applies Granger causality tests in a vector error correction (VEC) setting. Three alternative measures of financial sector development - total liquid liabilities, total banking sector credit and credit to the private sector - were employed to capture different ramifications of financial intermediation. Our results support the view that the extent of financial sophistication matters for the benefits of foreign direct investment to register on economic growth in Ghana, Gambia and Sierra Leone depending on the financial indicator used. Nigeria, on the other hand, displays no evidence of any short- or long-run causal flow from FDI to growth with financial deepening accompanying. In sum, therefore, what should be of utmost urgency is concerted efforts in most of these countries, which have typically been in the throes of economic reforms, to upgrade their financial structure to better position them to reap the desirable growth promoting effects of FDI flows.Item Purchasing Power Parity: Further Evidence from African Countries(Dr. Mohammad A. Wadud, 2011) Oyinlola, M. A.; Adeniyi, O. A.; Egwaikhide, F. O.In this paper we pursue an empirical enquiry into the validity of an equilibrium absolute purchasing power parity (PPP) for a sample of 26 economies in Africa. Using univariate as well as panel unit root tests on yearly observations spanning 1973 to 2008, we uncover evidence that the PPP notion holds in just a little over one third of the countries selected and breaks down on average when the latter class of tests are employed. In sum, non-linear modelling of exchange rate convergence to its PPP trajectory could foster understanding on the subject.Item Purchasing Power Parity: Further Evidence from African Countries(Dr. Mohammad A. Wadud, 2011) Oyinlola, M. A.; Adeniyi, O. A.; Egwaikhide, F. O.In this paper we pursue an empirical enquiry into the validity of an equilibrium absolute purchasing power parity (PPP) for a sample of 26 economies in Africa. Using univariate as well as panel unit root tests on yearly observations spanning 1973 to 2008, we uncover evidence that the PPP notion holds in just a little over one third of the countries selected and breaks down on average when the latter class of tests are employed. In sum, non-linear modelling of exchange rate convergence to its PPP trajectory could foster understanding on the subject.Item Savings trend and behaviour in Nigeria(West African Monetary Institute, 2004) Akpokodje, G.; Egwaikhide, F. O.; |Oyeranti, O. A.; Ayodele, O. S.Item Causality between budget deficit and the current account balance in African countries(West African Monetary Institute, 2002) Egwaikhide, F. O.; Oyeranti, O. A.; Ayodele, O. S.; Tchokote, J.