Authors : Mutiu A. Oyinlola and Festus O. Egwaikhide
Abstract: Exchange rate pass-through to different measures of domestic price in Nigeria is examined using a vector error correction model that incorporates exchange rate, money supply, world export price, income and tariff rate on annual data from 1980-2008. This study observes that long run relationship exist between exchange rate and domestic price level; nevertheless, the short run impact is not elusively evident. Short run variations in exchange rate might be anticipated and hence, the impact would be dampened. Government policy should refrain from using devaluation to address domestic price in the short term; such policy might be considered in the long term.
Mutiu A. Oyinlola and Festus O. Egwaikhide, 2011. Exchange Rate Pass-Through to Domestic Prices in Nigeria: A Dynamic Investigation. The Social Sciences, 6: 87-95.