The GARCH-MIDAS model was utilized to evaluate the components of economic policy uncertainty (EPU) that exert the greatest influence on exchange rate volatility. The findings indicate that both global EPU and its domestic counterpart (NEPU) contribute to exchange rate fluctuations; however, NEPU demonstrates a significantly stronger effect than GEPU. Additionally, the analysis identifies NEPU as a more effective predictor of exchange rate volatility relative to GEPU.

This study investigates trade shock transmission between selected African countries, the BRIC and the rest of the global economy with a view to understanding the likely disposition of African economies towards multilateralism in the years to come. The study extends the network approach of Diebold and Yilmaz [( 2009 ). Measuring financial asset return and volatility spillovers, with application to global equity markets. The Economic Journal, 119(534), 158–171, https://doi.org/10.1111/j.1468-0297.2008.02208.x ] by constructing generalized trade linkage measures at various degrees of aggregation using generalized forecast error variance decompositions of an underlying global vector autoregressive model. The results indicate that the trade linkage between Africa and the rest of the global economy is substantial, with the total trade linkage index having an average value of 87%. We find that China, USA, UK, Japan, EU and Canada dominate Africa’s trade and therefore have the potential to spread trade shocks to it. The results further indicate that apart from the BRIC, other regional trading blocs such as Asia, the Americas, and Europe play influential roles in Africa’s trade. Overall, the findings show that African economies are predominantly net receivers of trade shocks originating from the aforementioned dominant sources. We conclude that these patterns of cross-country trade shock spillovers, coupled with the ongoing challenges of legitimacy facing the World Trade Organisation, would likely influence Africa’s move from multilateralism to multi-polarism in the years to come.

Motivated by the theoretical prediction of a weak link between the cryptocurrency market and stock markets, most empirical literature contends that Bitcoin is a safe hedge for the stock market. Opposing this position is the view that portrays Bitcoin as a regular, high-risk asset, such that when stock prices rise, so does Bitcoin, and vice versa. To test the validity or otherwise of this competing view, we construct a bivariate predictive model to examine the predictive power of Bitcoin uncertainty on stock returns. In contrast to the extant literature, we rely on the novel measure of uncertainty (i.e., the Bitcoin uncertainty indices, hereinafter URCY) and specify a forecasting model. The objectives of this study are to examine (i) the predictive power of UCRY indices on stock returns and (ii) the extent to which UCRY can make accurate out-of-sample forecasts. Using data for the G7 countries, among other things, our findings show that Bitcoin uncertainty indices are negative predictors of stock returns across the countries under investigation. Results also reveal that the indices are accurate and reliable predictors of stock returns in the short-to-medium term. These results are robust to accounting for structural breaks (i.e., the COVID-19 pandemic) and some macroeconomic variables. The policy implications of these results are discussed.

Following the need for more recent rigorous empirical evidence on the role of institutions at sectoral level as well as the conflicting empirical evidences on the institutions-growth relationship in Africa, this study investigated the sectoral impacts of institutional quality in Sub-Saharan Africa (SSA). The study also revisited the role of institutions in the aggregate economy. The system GMM estimation procedure and a panel of 42 SSA countries were used over the period 2010 to 2018. The results indicate that contrary to the widely held view that institutions foster growth and development, the role of institutional quality in sectoral and aggregate economic performance in SSA generally remained muted. However, the results indicate that initial level of real GDP and labor are robust drivers of growth, particularly in the aggregate economy. The study therefore concludes that the sub-region requires institutional reform, enhanced human capital development and capital accumulation to drive sectoral and aggregate economic performance in SSA. JEL Classification : N20; F43; C23; N17

The oil price has been increasingly identified as a key fundamental in the dynamics of exchange rates. As a result, we investigate how changes in oil prices affect the dynamics of exchange rates during crisis periods. We hypothesised that the potential of oil prices as an amplifier of exchange rate volatility during crises varies for economic and non-economic crises with divergent origins. Consequently, we classified the crisis sample into two sub-samples: the great recession caused by the 2007 global financial crisis (GFC) is defined as a crisis sample with an economic origin, while the great lockdown caused by the recent COVID-19 outbreaks defined our crisis period with a non-economic origin. We used the GARCH model and its many extensions and noted three findings that strengthened our contributions to the empirical analysis of exchange rate volatility. First, we show that the divergent origins of economic and non-economic crises matter in terms of the extent to which they heighten exchange rate volatility. Second, the persistence of exchange rate volatility during COVID-19 is exacerbated by changes in international oil prices. Finally, our finding of varying dynamics of persistent (transient) exchange rate volatility across different samples of turbulent periods provides investors with evidence-based insights not to generalise their portfolio selection strategy amidst economic crises of different origins.

This paper examines spillover effects of U.S monetary policy on macroeconomic fundamentals in Nigeria from January 1985 to December 2018. The study period is partitioned to account for conventional monetary policy (CMP) period, January 1985 to August 2007 and unconventional monetary policy (UMP) period, September 2007 to December 2018. Guided by relevant pre-tests, we find BEKK-VARMA-CCCMGARCH as the most appropriate model. The study finds significant spillover effects of U.S CMP and UMP on interest rate, exchange rate and inflation rate in Nigeria. We, however, observe that while CMP may be a significant accelerator of shocks persistence on interest rates and exchange rates, the extent to which the UMP accelerate shocks in inflation rate tends to vary for different measures of quantitative easing. Thus, in addition to past own shocks and past own conditional variance of these macro fundamentals, understanding their dynamics cannot be in isolation of their vulnerability to external shocks and volatility due to spillover effects of monetary actions in other economies. In formulating monetary policy, it is therefore, imperative for the Central Bank of Nigeria to monitor the monetary policy process of the US to hedge against shocks spillovers.

The debate on the nexus between energy consumption and economic growth continues unabated with divergent views on the direction of the relationship. This is partly due to the sources and patterns of energy consumption across different countries, differential characteristics of the economies, and differences in the methodologies employed. Again, the mixed and inconclusive results from prior cointegration tests might have arisen from the assumption of symmetry when, in actuality, the response of economic growth to energy consumption may be asymmetric. Furthermore, for studies that employed the asymmetric cointegration analysis, the data generating process might account for the conflicting evidence, especially for annual series. Therefore, this paper re-evaluates the relationship between energy consumption and economic growth in Nigeria over the period 1999Q1–2016Q4 using alternative model specifications. Specifically, the study used a nonlinear (or asymmetric) ARDL model and an ARDL-ECM specification which presumes a linear relationship rather than a nonlinear one. Overall, we find that the role of energy consumption as a driver of growth remained negligible throughout, suggesting that a lot still needs to be done to ensure that the expected role of energy begins to manifest in the Nigerian economy. The Granger causality tests revealed a unidirectional causality running from energy consumption to economic growth, indicating that Nigeria can attain high levels of sustainable growth with improved and stable energy supply. Thus, the study concludes that these findings constitute a wake-up call on governments and policymakers in Nigeria and other Sub-Saharan African economies that share structural similarities with it that there is an urgent need to evolve and implement policies that will address the energy challenges of these economies. Keywords: Energy Consumption; Economic Growth; Nonlinear ARDL; Error Correction Model; Granger Causality JEL Classifications: Q41, O47, C51, C22, C32 DOI: https://doi.org/10.32479/ijeep.8902

This study tries to ascertain the long run determinants of foreign portfolio investment (FPI) in Nigeria such thatappropriate policies will be pursued to attract same in the long run. FPI has grown recently in proportion relative toother types of capital inflows to Nigeria before the wake of global financial crisis. Incidentally, there is no empiricalregularity regarding the determinants of FPI. This study tries to add to the stock of knowledge by modelling thelong-run determinants of FPI in Nigeria over the period of 1981-2010 converted into quarterly series. The variablesconsidered are, market capitalization, real exchange rate, real interest rate, real gross domestic product and tradeopenness. The study applies time series analysis specifically the finite distributed lag model and discovers that FPIhas a positive long-run relationship with market capitalization, and trade openness in Nigeria. Ongoing effortstherefore to sanitize the capital market should be vigorously pursued. Keywords : Nigeria, Foreign Portfolio Investment, macroeconomic variables.

The paper is an analysis of the federal budget process in Nigeria. It brings to the fore the nagging issue of late budget submission by the executive to the National Assembly and the attendant weak budget performance. The paper reiterates the importance of government budgetting in setting priorities and influencing the economy and thus posits that the ability to make timely and sensible fiscal choices is one of the hallmarks of good governance. Incidentally, timely budgeting is far from the norm in Nigeria and the extant laws are unable to address this important fiscal challenge. Unlike other papers on the subject matter, this analysis advances a framework that makes it easier to identify the avenues through which the Executive (President) or the Parliament can and do bungle the various elements of the budget process. The paper concludes by proffering institutional reforms that will correct the identified lapses if timeliness is to be achieved in the budgeting process thus, making budget implementation effective. Keywords: Budgeting Process, Institutional Reforms, Timeliness, Nigeria.

This is a study of the properties of the Nigeria’s tax system particularly the bases of the company income tax, valueadded tax and personal income tax. The results indicate that their bases are not stable (not persistent and volatile).However, while the bases of the company income tax and personal income tax are more sensitive to cyclical swings(current state of the economy over time), that of the value added tax (VAT) is not. The policy implications of thesefindings support the recent government tax policy reform of a shift in focus in the tax system from direct taxation toindirect taxation. With the tax base of VAT being insensitive to the current state of the economy, the revenuetherefrom will not drop sharply when the economy slows down. It will also shield the government from budgetaryshortfalls as it will likely cushion against sharp declines in aggregate tax revenues. Keywords : Tax System, Company Income Tax, Value Added Tax, Personal Income, Tax Policy, Nigeria.

This study investigated trade shock transmission between Africa, the BRIC and the rest of the global economy with a view to understanding the likely disposition of African economies towards trade shocks. The study extended the network approach of Diebold and Yilmaz (2009) by constructing generalized trade linkage measures at various degrees of aggregation. The results indicate that the trade linkage between Africa and the rest of the global economy is quite substantial, with the total trade linkage index having an average value of 87%. We find also that China, USA, UK, Japan, EU, and Canada dominate Africa’s trade and therefore have the potential to spread trade shocks to it. The results further indicate that apart from the BRIC, other regional trading blocs such as Asia, the Americas, and Europe play influential roles in Africa’s trade. Overall, the findings show that African economies are predominantly net receivers of trade shocks originating from the aforementioned dominant sources. The study therefore concludes that the patterns of cross-country trade shock spillovers obtained in this study would likely influence Africa’s move from globalization to regional integration or multi-polarity in the years to come.