Search Result

Srl

Item

ID: 167861

Growth and Fiscal Consequences of Terrorism in Nigeria / Chuku, Chuku; Abang, Dominic

Chuku, Chuku	Journal Article
	0 Rating(s) & 0 Review(s)

Summary/Abstract

In spite of government counter-terrorism expenditure and efforts, the incidence of terrorism in Nigeria appears to be rising. This paper examines the growth and fiscal consequences of terrorism in Nigeria by estimating the terrorism–macroeconomy relation using different measures of terror incidence. The results show that terrorism has an economically and statistically significant negative impact on growth; although this impact is considerably small and short-lived, manifesting only after a lag of about three years. Specifically, the cost of terrorism to Nigeria, in terms of lost GDP per annum, is estimated at 0.82%. Moreover, there is evidence that terrorism leads to the reallocation of economic activity away from private investment spending to government spending; that is, terrorism crowds out investment at a higher rate than its potential to crowd in government spending. Lastly, terrorism alters the composition of government expenditure – with the defence component of government expenditure rising vis-a-vis other expenditure items. The results are robust to allowing for dynamic interactions between terrorism and macroeconomic aggregates.

Key Words

Terrorism ; Economic Growth ; Structural VAR ; Transfer Functions ; Counter-Terrorism Expenditure

Links

'Full Text'

In Basket

Export

ID: 110745

Role of oil price shocks on macroeconomic activities: an SVAR approach to the Malaysian economy and monetary responses / Ahmed, Huson Joher Ali; Wadud, I K M Mokhtarul

Ahmed, Huson Joher Ali	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2011.

Summary/Abstract

This study examines the impact of oil price uncertainty on Malaysian macroeconomic activities and monetary responses. We use a structural VAR (SVAR) model based on monthly data over the period 1986-2009. The EGARCH model estimates show an important asymmetric effect of oil price shocks on the conditional oil price volatility. Dynamic impulse response functions obtained from the SVAR model show a prolonged dampening effect of oil price volatility shock on Malaysian industrial production. We also find that levels of Consumer Price Index (CPI) decline with a positive shock to oil price uncertainty. This is the result of negative demand shock due to the postponement of consumption of big ticket items by individuals, households and other sectors of the economy. We also found that the Malaysian central bank adopts an expansionary monetary policy in response to oil price uncertainty. Variance decomposition analysis reconfirms that volatility in the oil price is the second most important factor to explain the variance of industrial production after its own shocks. These results shed some light on how the central bank of Malaysia can use controlling mechanisms to stabilize aggregate output and price level.

Key Words

Structural VAR ; Oil Price Volatility ; Macroeconomic Activities

In Basket

Export