This paper examines the effects of oil price shocks on interest rate, real GDP and real effective exchange rate in Nigeria using a vector autoregressive (VAR) model. The results from the impulse response function suggests that positive oil price shocks have no effect on the interest rate (monetary policy), real exchange rate and real GDP. This result suggests that monetary policy in Nigeria does not respond to oil price shocks. Both the impulse response functions and variance decomposition analysis to a large extent confirmed that oil price shocks are only able to explain a small proportion of the forecast error variance of the variables under consideration.
Abokwah, Ama Agyeiwaa
"Effect of Oil Price Shock on Monetary Policy in Nigeria: A Vector Autoregressive Analysis,"
International Journal of African Development: Vol. 5:
2, Article 8.
Available at: https://scholarworks.wmich.edu/ijad/vol5/iss2/8