An Appraisal of Stabilization Policy Measures and its Implication on Balance of Trade in Nigeria.

International Journal of Economics and Management Studies
© 2019 by SSRG - IJEMS Journal
Volume 6 Issue 9
Year of Publication : 2019
Authors : Ewubare Dennis Brown , Uzoma Chidoka Nnamaka
How to Cite?

Ewubare Dennis Brown , Uzoma Chidoka Nnamaka, "An Appraisal of Stabilization Policy Measures and its Implication on Balance of Trade in Nigeria.," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 9, pp. 161-169, 2019. Crossref,


This study examined the effects of stabilization policy measures on balance of trade in Nigeria for a 38-year time period spanning from 1980 to 2017. Stabilization policy measures were segmented into money supply, interest rate, exchange rate, government expenditure and government tax and they served as the explanatory variables in the model. The time series data used for this work was sourced from the Central Bank of Nigeria (CBN) statistical bulletin and National Beaureu of Statistics (NBS). The study adopted the Auto Distributed Lags (ARDL)/ Bounds testing approach to cointegration to estimate the models. The test for unit root was carried out using the Augmented Dickey-Fuller (ADF) test for stationarity. The ADF test result showed that all the variables used in the study were stationary at first difference except for balance of trade which attained stationarity at levels. The Bounds test result revealed that the variables in the model have long run relationship. Evidence from the study showed that most of the stabilization policy indicators had significant negative impact on balance of trade in both the long-run and the short-run contrary to theoretical expectation save for interest rate which the inverse relationship was expected a priori. The absolute value of ECT (-1) term shows a 128 percent speed of convergence to equilibrium.The study therefore recommends that the monetary authority should implement interest rate policies that encourage an investment friendly economy in order to attract foreign investors into the economy thereby boosting the balance of trade position of the nation.


Stabilization Policy, Balance of Trade, Autoregressive Distributed Lags and Nigeria


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