Umar Bala - Academia.edu (original) (raw)
Papers by Umar Bala
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
Journal of economics and sustainable development, 2015
Electricity has been identified as primary and independent factor of production in modern product... more Electricity has been identified as primary and independent factor of production in modern production process. Hence, this study explore the relationship between electricity supply and manufacturing sector’s output in Nigeria using time series data from 1971 to 2010. It adopts Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration. Our findings reveal long run relationship between the variables, and shows significant and negative error correction term. Manufacturing output is found to be positively dependent on electricity in both short run and long run, but only significant in the long run.The policy implication of these findings is that electricity supply must be increased if the productive capacity of the manufacturing sector is to be improved. More importantly, this is a prove that if the country is to achieve its economic vision of being among the 20 World industrialized economies in the year 2020, adequate and stable increase in electricity supply, parti...
The impact of various macroeconomics variables on trade deficit has been studied in large OPEC (e... more The impact of various macroeconomics variables on trade deficit has been studied in large OPEC (e.g., United Arab Emirates and Kingdom of Saudi Arabia); however other African countries are still needed to be studied. This study uses the transmission oil price (OP) changes to various economic sectors to examine the threshold effects of OP and oil export on trade balance in African OPEC members (Algeria, Angola, Libya and Nigeria). This study applied Pedroni cointegration test to establish the cointegration relationship among different macroeconomics variables by using three different proxies of OP. The dynamic panel models were used to examine the long-run impact of OP changes and threshold analysis. The study found that increase in OP and oil export positively encouraged import while exchange rate depreciation is significantly discouraged import. The study found that the threshold effect of oil export on the trade balance, when oil export is above a certain threshold, the impact is higher than below threshold. The aforementioned countries have to take into account that there is a threshold level and can increase oil export to improve the trade balance.
European Journal of Business and Management, 2015
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
This study examined the impact of oil price on inflation, trade balance and economic growth in Af... more This study examined the impact of oil price on inflation, trade balance and economic growth in African OPEC member countries. The study applied transmitted channels of oil price to various economic sectors as a theoretical framework. Moreover, this study used annual panel data of four African OPEC members namely Algeria, Angola, Libya and Nigeria ranging from 1995 to 2014. Within this period the African OPEC countries witnessed a rapid increase in economic growth as oil price increases, while decreases in oil price produce ambiguity. In addition, this study used three different proxies of oil price in the analysis namely specific spot oil price of individual countries, OPEC reference oil price and an average of Brent, Dubai and West Texas Intermediate (WTI) oil price. The first objective of this study is to explore the non-linear impact of oil price on inflation in African OPEC members. The inflation rate is usually volatile in response to oil price changes. The dynamic panels ARDL ...
The purpose of this paper is to examine the asymmetric behavior in the adjustment of exchange rat... more The purpose of this paper is to examine the asymmetric behavior in the adjustment of exchange rate pass-through to consumer price index in Thailand. This research applies advanced threshold cointegration model proposed by Enders and Siklos (2001). Both the Threshold Autoregressive (TAR) and Momentum Threshold Autoregressive (MTAR) models result showed the evidence of cointegration in the non-zero threshold value. Furthermore, both models revealed that the adjustment towards long-run equilibrium are asymmetric. The adjustment during exchange rate depreciation significantly affect inflation, while the adjustment during exchange rate appreciation is not significant. This paper suggests that policy makers should have a different reaction in policy decision between the depreciation and appreciation of exchange rate pass-through to consumer price index.
This empirical study intends to examine the behavior of oil price on Malaysian economic growth wh... more This empirical study intends to examine the behavior of oil price on Malaysian economic growth whether nonlinearity implies. The dynamic models of Linear and Nonlinear Autoregressive Distribution Lags (ARDL and NARDL) are used to estimate the models. The study used annual data over the period of 1975 to 2015. The study used the real Malaysian spot oil price (Miri) as oil price unlike. The results from linear model revealed that oil price positively increase economic growth both in the short-run and the long-run. To achieve our objective, the NARDL estimator was used to detect the impact of positive and negetive changes in oil price. The results reveal that there is nonlinear relation among the variables in the long-run relationship as the evidence of cointegration was found. Increases in oil price boosts economic growth positively while a decrease in oil price is not as indicate insignificant. The error correction term confirms the results as indicate negative, significant and less ...
This study examined the long run impact of oil export and food production on inflation in African... more This study examined the long run impact of oil export and food production on inflation in African OPEC member countries. The countries consist Algeria, Angola, Libya and Nigeria. This study applied Pedroni cointegration test. In addition, dynamic panel ARDL models (PMG and MG estimators) were also used. This study found that the long-run coefficient of oil exports, money supply, exchange rate and GDP are positively related to inflation while food production is negatively related to inflation. The policy makers should maintain a certain level of oil export to minimize the rate of inflation, also to encourage domestic food production to reduce the rate of inflation. Besides that, the study also concludes that increase in money supply and depreciation of exchange rate cause inflation rate. Hence, the policy makers can use the contractionary monetary policy as well as currency control to reduce the inflation rate in OPEC member countries.
This research explores the impact of population growth, poverty and unemployment on economic grow... more This research explores the impact of population growth, poverty and unemployment on economic growth in Nigeria using Auto Regressive Distributed Lag (ARDL). The study employed an econometric procedure; unit root test which involved the use of Augmented Dickey Fuller test (ADF) and Phillip-Perron test (PP). The cointegration test technique used in the study is Auto Regressive and Distributed Lag (ARDL). The study variables are real GDP, population, poverty, unemployment and foreign direct investment has control variable. The null hypothesis stated that there is presence of a unit root was failed to be rejected at levels but rejected at first difference according to the two tests (ADP and PP) employed. The study found that some of the variables are stationary at level I(0) while others are stationary at first difference I(1).The results of the cointegration test showed that there exist cointegrating equation between explanatory variables and economic growth. The ECT speed of adjustmen...
The nexus between oil price and exchange rate has been explored widely in the theoretical and emp... more The nexus between oil price and exchange rate has been explored widely in the theoretical and empirical literatures revealing factors that influence exchange rate fluctuation. Therefore, this research examines the role of trade openness and oil price on the behaviour of exchange rate in Nigeria. We applied Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration based on annual time series data from 1982 to 2014. The variables are cointegrated indicating that they exhibit long run relationship. Also, the estimated value of the error correction term is less than one, negative but significant. Exchange rate was found to be negatively dependent on trade openness in both the short run and the long run, while oil price was found to be negative and insignificant in the long run. The policy implication of these findings is that high dependency on oil price is not favorable to exchange rate determination in Nigeria. There is need to diversify the source of foreign reve...
This empirical research examined the interconnecting relationship between oil price, exchange rat... more This empirical research examined the interconnecting relationship between oil price, exchange rate and food prices in Nigeria. The study applied annual time series data from 1972 to 2016. Autoregressive Distributed Lag (ARDL) techniques were used in the process of estimating the model. The main results disclosed that there is a long run association among the considered variables. The error correction term indicates significant negative sign. Among the two independent variables in the model, exchange rate is affecting food price more than the oil price counterpart since some of the food items are imported. The result has robust implication on policy recommendations in Nigeria. Food production has a vital role in influencing food prices in Nigeria. The Central Bank of Nigeria must consider exchange rate as a factor influencing food price in its quest for achieving inflation target.
This article investigated the impact of human capital and technology on economic growth in Nigeri... more This article investigated the impact of human capital and technology on economic growth in Nigeria. We employed annual time series data for the period of 35 years (1975-2010) and applied autoregressive distributed lag approach to cointegration to examine the relationship between human capital, technology, and economic growth. Two proxies of human capital (secondary and tertiary school enrollments) were used in two separate models. The cointegration result revealed that all the variables in the two separate models were cointegrated. Furthermore, the results of the two estimated models showed that human capital in form in secondary and tertiary school enrollments have had significant positive impact on economic growth. More so, technology also shows significant positive impact on economic growth. In a nutshell, both human capital and technology are important determinants of growth in Nigeria. Therefore, improvement of the educational sector and more funding for research and development (R&D) to encourage innovations are needed to facilitate Nigeria’s sustained economic growth.
This empirical analysis intends to examine the asymmetric response of economic growth when the oi... more This empirical analysis intends to examine the asymmetric response of economic growth when the oil price changes in Malaysia by applying threshold autoregressive (TAR) and momentum threshold autoregressive (MTAR) cointegration and asymmetric adjustment models. The results revealed that the oil price has an asymmetric impact on Malaysian economic growth. We found that when oil price increases this accelerates economic growth; however, the speeds of adjustment back to the steady position were insignificant. When the oil price dropped, oil price significantly and negatively affects economic growth for a period of time and then returns back to its normal position. The results revealed that Malaysian economic growth constantly benefits when the oil price increases and is temporarily negatively affected when oil prices drop. The results have important policy implications. This suggests that it is essential to the policy makers to consider different policy responses for hikes and drops in ...
Asian Bulletin of Energy Economics and Technology
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Ango... more This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Angola, Libya and Nigeria. Three different oil price data were applied in this study; the specific spot oil price of individual countries, the OPEC reference basket oil price and an average of the Brent, WTI and Dubai oil price. The dynamic panels ARDL were used to estimate the short and the long-run impacts. Also, this study partitioned the oil price into positive and negative changes to capture asymmetric impacts and found both positive and negative oil price changes positively influenced inflation. However, the impact was found to be more significant when oil prices dropped. The results from the study also found that money supply, the exchange rate and GDP are positively related to inflation while food production is negatively related to inflation. Accordingly, policymakers should be cautious in formulating policies between the positive and negative changes in oil prices as it was shown t...
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
Journal of economics and sustainable development, 2015
Electricity has been identified as primary and independent factor of production in modern product... more Electricity has been identified as primary and independent factor of production in modern production process. Hence, this study explore the relationship between electricity supply and manufacturing sector’s output in Nigeria using time series data from 1971 to 2010. It adopts Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration. Our findings reveal long run relationship between the variables, and shows significant and negative error correction term. Manufacturing output is found to be positively dependent on electricity in both short run and long run, but only significant in the long run.The policy implication of these findings is that electricity supply must be increased if the productive capacity of the manufacturing sector is to be improved. More importantly, this is a prove that if the country is to achieve its economic vision of being among the 20 World industrialized economies in the year 2020, adequate and stable increase in electricity supply, parti...
The impact of various macroeconomics variables on trade deficit has been studied in large OPEC (e... more The impact of various macroeconomics variables on trade deficit has been studied in large OPEC (e.g., United Arab Emirates and Kingdom of Saudi Arabia); however other African countries are still needed to be studied. This study uses the transmission oil price (OP) changes to various economic sectors to examine the threshold effects of OP and oil export on trade balance in African OPEC members (Algeria, Angola, Libya and Nigeria). This study applied Pedroni cointegration test to establish the cointegration relationship among different macroeconomics variables by using three different proxies of OP. The dynamic panel models were used to examine the long-run impact of OP changes and threshold analysis. The study found that increase in OP and oil export positively encouraged import while exchange rate depreciation is significantly discouraged import. The study found that the threshold effect of oil export on the trade balance, when oil export is above a certain threshold, the impact is higher than below threshold. The aforementioned countries have to take into account that there is a threshold level and can increase oil export to improve the trade balance.
European Journal of Business and Management, 2015
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
This study examined the impact of oil price on inflation, trade balance and economic growth in Af... more This study examined the impact of oil price on inflation, trade balance and economic growth in African OPEC member countries. The study applied transmitted channels of oil price to various economic sectors as a theoretical framework. Moreover, this study used annual panel data of four African OPEC members namely Algeria, Angola, Libya and Nigeria ranging from 1995 to 2014. Within this period the African OPEC countries witnessed a rapid increase in economic growth as oil price increases, while decreases in oil price produce ambiguity. In addition, this study used three different proxies of oil price in the analysis namely specific spot oil price of individual countries, OPEC reference oil price and an average of Brent, Dubai and West Texas Intermediate (WTI) oil price. The first objective of this study is to explore the non-linear impact of oil price on inflation in African OPEC members. The inflation rate is usually volatile in response to oil price changes. The dynamic panels ARDL ...
The purpose of this paper is to examine the asymmetric behavior in the adjustment of exchange rat... more The purpose of this paper is to examine the asymmetric behavior in the adjustment of exchange rate pass-through to consumer price index in Thailand. This research applies advanced threshold cointegration model proposed by Enders and Siklos (2001). Both the Threshold Autoregressive (TAR) and Momentum Threshold Autoregressive (MTAR) models result showed the evidence of cointegration in the non-zero threshold value. Furthermore, both models revealed that the adjustment towards long-run equilibrium are asymmetric. The adjustment during exchange rate depreciation significantly affect inflation, while the adjustment during exchange rate appreciation is not significant. This paper suggests that policy makers should have a different reaction in policy decision between the depreciation and appreciation of exchange rate pass-through to consumer price index.
This empirical study intends to examine the behavior of oil price on Malaysian economic growth wh... more This empirical study intends to examine the behavior of oil price on Malaysian economic growth whether nonlinearity implies. The dynamic models of Linear and Nonlinear Autoregressive Distribution Lags (ARDL and NARDL) are used to estimate the models. The study used annual data over the period of 1975 to 2015. The study used the real Malaysian spot oil price (Miri) as oil price unlike. The results from linear model revealed that oil price positively increase economic growth both in the short-run and the long-run. To achieve our objective, the NARDL estimator was used to detect the impact of positive and negetive changes in oil price. The results reveal that there is nonlinear relation among the variables in the long-run relationship as the evidence of cointegration was found. Increases in oil price boosts economic growth positively while a decrease in oil price is not as indicate insignificant. The error correction term confirms the results as indicate negative, significant and less ...
This study examined the long run impact of oil export and food production on inflation in African... more This study examined the long run impact of oil export and food production on inflation in African OPEC member countries. The countries consist Algeria, Angola, Libya and Nigeria. This study applied Pedroni cointegration test. In addition, dynamic panel ARDL models (PMG and MG estimators) were also used. This study found that the long-run coefficient of oil exports, money supply, exchange rate and GDP are positively related to inflation while food production is negatively related to inflation. The policy makers should maintain a certain level of oil export to minimize the rate of inflation, also to encourage domestic food production to reduce the rate of inflation. Besides that, the study also concludes that increase in money supply and depreciation of exchange rate cause inflation rate. Hence, the policy makers can use the contractionary monetary policy as well as currency control to reduce the inflation rate in OPEC member countries.
This research explores the impact of population growth, poverty and unemployment on economic grow... more This research explores the impact of population growth, poverty and unemployment on economic growth in Nigeria using Auto Regressive Distributed Lag (ARDL). The study employed an econometric procedure; unit root test which involved the use of Augmented Dickey Fuller test (ADF) and Phillip-Perron test (PP). The cointegration test technique used in the study is Auto Regressive and Distributed Lag (ARDL). The study variables are real GDP, population, poverty, unemployment and foreign direct investment has control variable. The null hypothesis stated that there is presence of a unit root was failed to be rejected at levels but rejected at first difference according to the two tests (ADP and PP) employed. The study found that some of the variables are stationary at level I(0) while others are stationary at first difference I(1).The results of the cointegration test showed that there exist cointegrating equation between explanatory variables and economic growth. The ECT speed of adjustmen...
The nexus between oil price and exchange rate has been explored widely in the theoretical and emp... more The nexus between oil price and exchange rate has been explored widely in the theoretical and empirical literatures revealing factors that influence exchange rate fluctuation. Therefore, this research examines the role of trade openness and oil price on the behaviour of exchange rate in Nigeria. We applied Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration based on annual time series data from 1982 to 2014. The variables are cointegrated indicating that they exhibit long run relationship. Also, the estimated value of the error correction term is less than one, negative but significant. Exchange rate was found to be negatively dependent on trade openness in both the short run and the long run, while oil price was found to be negative and insignificant in the long run. The policy implication of these findings is that high dependency on oil price is not favorable to exchange rate determination in Nigeria. There is need to diversify the source of foreign reve...
This empirical research examined the interconnecting relationship between oil price, exchange rat... more This empirical research examined the interconnecting relationship between oil price, exchange rate and food prices in Nigeria. The study applied annual time series data from 1972 to 2016. Autoregressive Distributed Lag (ARDL) techniques were used in the process of estimating the model. The main results disclosed that there is a long run association among the considered variables. The error correction term indicates significant negative sign. Among the two independent variables in the model, exchange rate is affecting food price more than the oil price counterpart since some of the food items are imported. The result has robust implication on policy recommendations in Nigeria. Food production has a vital role in influencing food prices in Nigeria. The Central Bank of Nigeria must consider exchange rate as a factor influencing food price in its quest for achieving inflation target.
This article investigated the impact of human capital and technology on economic growth in Nigeri... more This article investigated the impact of human capital and technology on economic growth in Nigeria. We employed annual time series data for the period of 35 years (1975-2010) and applied autoregressive distributed lag approach to cointegration to examine the relationship between human capital, technology, and economic growth. Two proxies of human capital (secondary and tertiary school enrollments) were used in two separate models. The cointegration result revealed that all the variables in the two separate models were cointegrated. Furthermore, the results of the two estimated models showed that human capital in form in secondary and tertiary school enrollments have had significant positive impact on economic growth. More so, technology also shows significant positive impact on economic growth. In a nutshell, both human capital and technology are important determinants of growth in Nigeria. Therefore, improvement of the educational sector and more funding for research and development (R&D) to encourage innovations are needed to facilitate Nigeria’s sustained economic growth.
This empirical analysis intends to examine the asymmetric response of economic growth when the oi... more This empirical analysis intends to examine the asymmetric response of economic growth when the oil price changes in Malaysia by applying threshold autoregressive (TAR) and momentum threshold autoregressive (MTAR) cointegration and asymmetric adjustment models. The results revealed that the oil price has an asymmetric impact on Malaysian economic growth. We found that when oil price increases this accelerates economic growth; however, the speeds of adjustment back to the steady position were insignificant. When the oil price dropped, oil price significantly and negatively affects economic growth for a period of time and then returns back to its normal position. The results revealed that Malaysian economic growth constantly benefits when the oil price increases and is temporarily negatively affected when oil prices drop. The results have important policy implications. This suggests that it is essential to the policy makers to consider different policy responses for hikes and drops in ...
Asian Bulletin of Energy Economics and Technology
This study investigated the impact of monetary policy rate, interbank rate and savings deposit on... more This study investigated the impact of monetary policy rate, interbank rate and savings deposit on inflation rate in Nigeria over the period of January, 2006 – November, 2014. To achieve the objective, an autoregressive distributed lag model was employed to estimate both the long-run and short-run models. The result of the long-run model reveals that monetary policy rate, interbank rate and savings deposit were all negatively and significantly affecting inflation rate within the studied period. In similar vein, in the short-run, monetary policy rate and interbank rates were negative and significant in determining inflation fluctuations. Though savings deposit depicts positive sign but was found to be insignificant in the short-run. As such, both long-and short-run findings were in conformity with the theoretical expectations. Therefore, the policy suggestion is that the central bank of Nigeria (CBN) should consider strengthening the use these policy instruments in controlling inflati...
This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Ango... more This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Angola, Libya and Nigeria. Three different oil price data were applied in this study; the specific spot oil price of individual countries, the OPEC reference basket oil price and an average of the Brent, WTI and Dubai oil price. The dynamic panels ARDL were used to estimate the short and the long-run impacts. Also, this study partitioned the oil price into positive and negative changes to capture asymmetric impacts and found both positive and negative oil price changes positively influenced inflation. However, the impact was found to be more significant when oil prices dropped. The results from the study also found that money supply, the exchange rate and GDP are positively related to inflation while food production is negatively related to inflation. Accordingly, policymakers should be cautious in formulating policies between the positive and negative changes in oil prices as it was shown t...