TO GET THE COMPLETE JOURNAL/THESIS FOR TOPIC BELOW,
CALL: 08168759420, 08068231953
WHATSAPP: 08137701720
EXCHANGE RATE AND BALANCE OF PAYMENT: AN AUTOREGRESSIVE DISTRIBUTED LAG (ARDL) ECONOMETRIC INVESTIGATION ON NIGERIA
Abstract: This study examines the impact of exchange rate on balance of payment in Nigeria, using annual data from 1971 to 2012. The empirical methodology employed autoregressive distributed lag (ARDL) cointegration estimation technique to detect possible long-run and short-run dynamic relationship between the variables used in the model. The study also tested the Marshall-Lerner (ML) condition to see if it is satisfied for Nigeria. The results provided evidence in favour of a positive and statistically significant relationship in the long-run and also a positive but statistically insignificant relationship in the short-run between balance of payment and exchange rate. The results further revealed that depreciation/devaluation improves balance of payment and that Marshall-Lerner (ML) condition subsists for Nigeria. The study recommends policies that will discourage excessive importation and promote incentive based export promotion programmes. It further recommends diversification of the economy and the promotion of entrepreneurial development in Nigeria.
Keywords: Exchange Rate, Autoregressive Distributed Lag Model, Balance of Payment, Marshall-Lerner Condition.