Author : Agom joseph msoughga
Keyword : Cointegration, trade openness, exchange rate, gross domestic product
Subject : Statistics
Article Type : Original article (research)
Article File : Full Text PDF
Abstract : Countries trade with each other because it is believed that trading typically makes a country better off. This study aims at investigating the long-run relationship between trade openness, economic growth, and exchange rate in Nigeria and the direction of causality between them. Data spanning from 1962 through 2016, were obtained from the Central Bank of Nigeria Statistical Bulletin. Statistical analysis were achieved by employing the ADF test for stationarity, the Johansen test for cointegration, the Granger causality test for the direction of relationship and Vector Error Correction technique to reconcile the long-run and the short-run relationship of the variables. A long-run relationship was found to exist among the macro economic variables; Trade Openness, Exchange Rate and Gross Domestic Product. Trade Openness has a cause effect on Exchange Rate and Gross Domestic Product in Nigeria. A bi-directional relationship was found to exist between Gross Domestic Product and Exchange Rate. Short-run changes in Gross Domestic Product positively affects Trade Openness with about 33.78% per unit change in Gross Domestic Product in Nigeria. Trade Openness in Nigeria is above its equilibrium value but will adjust back to equilibrium with a speed of about 62.07%.
Article by : AGOM JOSEPH MSOUGHGA
Article add date : 2021-04-12
How to cite : Agom joseph msoughga. (2021-April-12). Application of time series analysis to some indices of international trade during the period 1962 t0 2016 in nigeria. retrieved from https://openacessjournal.com/abstract/699