Asymmetric Effects of Expected Oil Wealth on the Demand for Money in Nigeria
Asymmetric Effects of Expected Oil Wealth on the Demand for Money in Nigeria
Author(s): Anthony Enisan AkinloSubject(s): Economy, Business Economy / Management, Financial Markets, Socio-Economic Research
Published by: EDITURA ASE
Keywords: asymmetric effects; oil wealth; long-term impact;
Summary/Abstract: The paper investigates the asymmetric effects of expected oil wealth on the demand for money in Nigeria over the period 1986:Q1–2020:Q4, by using linear autoregressive distributed lag (ARDL) and nonlinear ARDL (NARDL) approaches. The linear (ARDL) bounds testing approach shows that expected oil wealth has no significant effect both in the short and long run. However, when a NARDL model is applied, the effect of negative and positive expected oil wealth shocks on the demand for money is significant and unequal in the long run, with a higher long-term impact of negative shocks compared to positive shocks. This result highlights a long-run asymmetry in the transmission of expected oil wealth shocks. Expected oil wealth is thus rather a long-run phenomenon for the Nigerian money demand function.
Journal: The Review of Finance and Banking
- Issue Year: 16/2024
- Issue No: 1
- Page Range: 105-119
- Page Count: 15
- Language: English
