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Responses of the Internal and External Economic Conditions to Exchange Rate Regimes in Nigeria: The Comparative Analysis

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  • Lee Lee N. Deekor

Abstract

Exploring the ARDL modeling techniques, this study hypothesized that the internal and external economic conditions respond differently to exchange rate regimes. Covering the period between 1970 and 2020, the study shows that both fixed regime and intermediate regimes have the potential of causing declining inflation (INFL) compared to floating exchange rate regimes. However, when the economic condition is considered from the external perspective measures using trade balance, the magnitude of the impact of both fixed and intermediate regimes appears to be relatively higher for the external economic condition (trade balance) compared to inflation which is a measure for internal economic condition. More importantly, our findings tend to find support in a number of the previous studies.

Suggested Citation

  • Lee Lee N. Deekor, 2022. "Responses of the Internal and External Economic Conditions to Exchange Rate Regimes in Nigeria: The Comparative Analysis," Journal of Social Science Studies, Macrothink Institute, vol. 9(1), pages 1-34, June.
    • Handle: RePEc:mth:jsss88:v:9:y:2022:i:1:p:34
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    References listed on IDEAS

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    1. Jeannine Bailliu & Robert Lafrance & Jean‐François Perrault, 2003. "Does Exchange Rate Policy Matter for Growth?," International Finance, Wiley Blackwell, vol. 6(3), pages 381-414, November.
    2. Jeff Fuhrer & George Moore, 1995. "Inflation Persistence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 127-159.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 1-48.
    4. William Miles, 2006. "To Float Or Not To Float? Currency Regimes And Growth," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 31(2), pages 91-105, December.
    5. Fuhrer, Jeffrey C., 2010. "Inflation Persistence," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 9, pages 423-486, Elsevier.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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