Do Trading Partners Still Matter for Nigeria's Growth? A Contribution to the Debate on Decoupling and Spillovers

Author/Editor: Obiora, Kingsley I.
Publication Date: October 01, 2009
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: Should policymakers still be concerned about economic growth in trading partners? Have developing and emerging market countries decoupled from the US enough to grow despite significant recession in the US? Using VAR models, this paper addresses these questions for Nigeria in the context of the global crisis. The results seem to debunk the "decoupling theory" and suggest there are still significant spillovers from Nigeria's main trading partners, including the US, with trade and commodity price linkages being the dominant transmission channels. Given the sharp fall in both trade financing and commodity prices in aftermath of the crisis, these results provide some explanation to the realization of adverse second-round effects in Nigeria.
Series: Working Paper No. 09/218
Subject(s): Brazil | Cross country analysis | Direction of trade | Economic growth | Economic models | European Union | Financial crisis | Global competitiveness | International trade | Nigeria | Spillovers | Trade policy | United States

Author's Keyword(s): Trading Partners | Decoupling | Spillovers | Vector Autoregression
Publication Date: October 01, 2009
Format: Paper
Stock No: WPIEA2009218 Pages: 30
US$18.00 (Academic Rate:
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