efficiencie:
[b] Renowned economist Henry Boyo described the eight per cent devaluation of the naira as “a big mistake ”. He said the policy shift remained a wrong concept that will persist because the CBN has learnt nothing from history. He said the devaluation will even move to 20 per cent as the black market continues to outstrip the official rate. Boyo said the prices of goods and services will gradually go up, as importers add the increase to the cost of goods and services. He equally sees the price of fuel going up, despite declining oil price. He said Nigeria has learnt nothing from what happened to the Ghanaian and Zimbabwean
currencies. “I see the naira being devalued by 20 per cent as time progresses. I have
repeatedly said that mopping up the naira to achieve exchange rate stability is wrong. The CBN substitution of the naira allocations for dollar should be stopped. Allocations should be divided based on dollar certificates. The exchange rate for the naira will continue to fall ,” he said. [/b]

Source: http://thenationonlineng.net/new/devaluation-of-naira-the-good-the-bad-the-ugly/

Now what!? Could excess liquidity really be the reason for the pressure on the naira?

Excess liquidity bids up aggregate expenditure with private and govt consumption so much that importation is massive then this could depreciate the naira and though the long term remedy would be a structural reform that substitutes import industries with domestic industries in the short term the use of dollar certificates would stem the pressure on the naira but with a caveat. The caveat is that this policy directive would encourage dollarization and this could portend adverse consequences for monetary policy as dollarization could paralize the MPR, CRR and even OMO!

Please share your views!

Again is it not expected that the crash in oil prices would make importation of PMS cheaper and hence reduce the pump price of PMS? The crashing oil price may have its blessings too.

NOW WE ARE IN FOR A SHOCKER


EC will not cut oil production even if the price drops
to $20 a barrel and it is unfair to expect the cartel to
reduce output if non-members do not, Saudi Arabia
said.
“Whether it goes down to $20 a barrel, $40, $50, $60,
it is irrelevant,” the kingdom’s Oil Minister Ali al-Naimi
said in an interview with the Middle East Economic
Survey (MEES), an industry weekly.
In unusually detailed comments, Naimi defended
a decision by the Organization of the Petroleum
Exporting Countries, whose lead producer is Saudi
Arabia, last month to maintain a production ceiling of
30 million barrels per day.
The decision sent global crude prices tumbling,
worsening a price drop that has seen them fall by
around 50 percent since June.
Slower demand growth and a stronger dollar have also
contributed to the slump.
Saudi Arabia has traditionally acted to balance demand
and supply in the global oil market because it is the
only country with substantial spare production capacity,
according to the International Monetary Fund.
The kingdom pumps about 9.6 million barrels per day
but Naimi said it is “crooked logic” to expect his
country to cut and then lose business to other major
producers outside OPEC.
The increasingly competitive global oil market has seen
daily United States output rise by more than 40 percent
since 2006, but at a production cost which can be
three or four times that of extracting Middle Eastern oil.
“Is it reasonable for a highly efficient producer to
reduce output, while the producer of poor efficiency
continues to produce?” Naimi asked during the
interview conducted with MEES on Sunday.
“If I reduce, what happens to my market share? The
price will go up and the Russians, the Brazilians, US
shale oil producers will take my share.”
Naimi added it is “unfair” for the cartel to reduce
output because it is not pumping most of the world’s
oil.
“We produce less than 40 percent of global output. We
are the most efficient producer. It is unbelievable after
the analysis we carried out for us to cut,” he said.

source: http://www.vanguardngr.com/2014/12/opec-wont-cut-output-even-at-20-a-barrel/


HOW WOULD THIS PLAY OUT IN AN IS-LM-BP ANALYSIS GIVEN THE MONETARY TIGTHENING REGIME, FISCAL TIGHTENING AND HIGH IMPORTS PRESSURE?

Over to the economic thinkers

The relationship between marginals and averages is examined below:

if TR=AR.Q

where TR is total revenue, AR is average revenue and Q is quantity

then

dTR/dQ=AR.dQ/dQ + Q.dAR/dQ

dTR/dQ=AR + Q.dAR/dQ

MR=AR + Q.dAR/dQ

since MR= dTR/dQ

MR=AR(1+{Q/AR}.{dAR/dQ})

MR=AR(1-1/e)…*

where e=-{dQ/dAR}.{AR/Q} is the elasticity of demand

QU1: with the aid of the result * prove that irrespective of whether the good Q is normal or abnormal in demand, if the elasticity is infinite then MR equals the AR.

QU2. What is the range of values of 'e' that a monopolist like Dangote, for instance, would consider when making pricing decisions.

QU3. If the government of Abacha increasingly gave subsidies to Dangote to cover the extra cost per unit of extra output such that the private marginal cost becomes negative then specify the range of values of 'e' that would enable Dangote fend off any likely competitors in a price war.

@efficiencie , I totally agree and appreciate your analysis, it all boils down to implementation. Sometimes I wonder if the people handling our economic affairs are even educated at all.

# Me I don tire oooo bros. #

Appliedmaths:
@ efficiencie , I totally agree and appreciate your analysis, it all boils down to implementation. Sometimes I wonder if the people handling our economic affairs are even educated at all.

# Me I don tire oooo bros. #

Nice thread how come you guys stopped all of a sudden. I went through you guys topics & it seems you studied in Benin?

stephano100:

Nice thread how come you guys stopped all of a sudden. I went through you guys topics & it seems you studied in Benin?

Yeah, I studied in UNIBEN.

Appliedmaths:


Yeah, I studied in UNIBEN.

Thought as much, did Ecostat u?

stephano100:

Thought as much, did Ecostat u?

Maths Eco.

Appliedmaths:


Maths Eco.

Cool, what're you on currently, I'm serving atm

stephano100:

Cool, what're you on currently, I'm serving atm

Done serving, on the job lookout. How things?

Appliedmaths:


Done serving, on the job lookout. How things?

I'm good, have you gotten any professional certification?

stephano100:

I'm good, have you gotten any professional certification?

I did pmp and basic office safety. Use your discretion, u can do nim or strategic mgt.

Appliedmaths:


I did pmp and basic office safety. Use your discretion, u can do nim or strategic mgt.

From what I heard nim do not hold much value in the job market & which organization runs the strategic mgt cert.?

Bosses.......you first put fear in my mind concerning Economics as a course...that I fear going into it but nevertheless I will go and see for myself.....you make it looks as if it very difficult but I won't want you to stop because I think I will be needing all this in the future.

horlawharley:
Bosses.......you first put fear in my mind concerning Economics as a course...that I fear going into it but nevertheless I will go and see for myself.....you make it looks as if it very difficult but I won't want you to stop because I think I will be needing all this in the future.

Economics is practical, its something you see and can easily relae to on a daily basis. Relax, you'll be glad you did.

stephano100:

From what I heard nim do not hold much value in the job market & which organization runs the strategic mgt cert.?

True, scout your area to know whats up.

Appliedmaths:


True, scout your area to know whats up.

Thanks bro, stay safe.

Appliedmaths:


Economics is practical, its something you see and can easily relae to on a daily basis. Relax, you'll be glad you did.

Alright thanks boss

Appliedmaths:


Economics is practical, its something you see and can easily relae to on a daily basis. Relax, you'll be glad you did.

True, Economics is practical, but Economics as taught in Nigerian universities is disconnected from the realities of the Nigerian economy. I did my MSc at UNIBEN and i am amazed to find that MV=PT, Irving Fischer's truism, that was taught in 100l, 200l, 300l and annoyingly 400l was also taught in monetary economics class at the 800l. Isn't that amazingly absurd! Corporate Finance, a close cousin of Financial Economics, is also taught at UNIBEN and sadly students in that class cannot use spreadsheet packages, do not know key central bank terminologies, cannot decipher the current trend in central banking and commercial banking in Nigeria and offer useful criticisms, don't know the current targeting paradigm of the CBN and are largely disconnected from the core their discipline...

I felt UNIBEN would even measure up in the teaching of Econometrics but sadly i was sorely disappointed as the training i got was the standard 300l training I got in my undergraduate days. The average MSc/PhD graduate in Economics at UNIBEN can hardly handle such econometric methods as: ARIMA, SVAR, SVEC, FAVAR, TVAR, TSVAR, PVAR, GMM, WLS, SEM and the more recent DSGE Modeling. My claims may appear outrageous but i enjoin you to make your investigation before pouring your money into an education that is not really education...but just a certificate accumulation exercise!

efficiencie:


True, Economics is practical, but Economics as taught in Nigerian universities is disconnected from the realities of the Nigerian economy. I did my MSc at UNIBEN and i am amazed to find that MV=PT, Irving Fischer's truism, that was taught in 100l, 200l, 300l and annoyingly 400l was also taught in monetary economics class at the 800l. Isn't that amazingly absurd! Corporate Finance, a close cousin of Financial Economics, is also taught at UNIBEN and sadly students in that class cannot use spreadsheet packages, do not know key central bank terminologies, cannot decipher the current trend in central banking and commercial banking in Nigeria and offer useful criticisms, don't know the current targeting paradigm of the CBN and are largely disconnected from the core their discipline...

I felt UNIBEN would even measure up in the teaching of Econometrics but sadly i was sorely disappointed as the training i got was the standard 300l training I got in my undergraduate days. The average MSc/PhD graduate in Economics at UNIBEN can hardly handle such econometric methods as: ARIMA, SVAR, SVEC, FAVAR, TVAR, TSVAR, PVAR, GMM, WLS, SEM and the more recent DSGE Modeling. My claims may appear outrageous but i enjoin you to make your investigation before pouring your money into an education that is not really education...but just a certificate accumulation exercise!

I could remember I started using Eviews and SPSS in my 300L, of course we werent taught I went further to develope myself. It was during my project my surpervisor taught myself and some friends. Point is, the educational system nation wide is porous, no standards. Takes a smart student to go extra mile and develop him/her self. If u rely on the system, you're gone.

Appliedmaths:



I could remember I started using Eviews and SPSS in my 300L, of course we werent taught I went further to develope myself. It was during my project my surpervisor taught myself and some friends. Point is, the educational system nation wide is porous, no standards. Takes a smart student to go extra mile and develop him/her self. If u rely on the system, you're gone.

It then makes me ask the question: of what use is our educational system, if it cannot train people to take up meaningful roles in the society? Is it not better we shut these certificate production and sales centres and build real schools?

efficiencie:


It then makes me ask the question: of what use is our educational system, if it cannot train people to take up meaningful roles in the society? Is it not better we shut these certificate production and sales centres and build real schools?

Agreed...............so how did you came about develping yourself with all those methods you listed above?

Can you imagine that the lecturer who taught me econometrics at UNIBEN, billed me and my classmates 10,000 naira to assist us in estimating econometric models...meaning he knew he did not teach us enough to be able to do it ourselves and guess what, those who did not pay the said fee but went ahead to seek alternative means of estimating their econometric models were deemed not to have submitted their assignments, though they did submit, and they were awarded Fs in the course...

I have known for some time that the worst sets of people in this country are not politicians...but these corrupt teachers, lecturers and school administrators! They forget that the educational institution is the bedrock of every other institution and if the educational institution fails, all other institutions will fail...We have corrupt politicians, corrupt husbands, corrupt wives, corrupt pastors, violent muslims, delinquent childen and irresponsible adults because the institution of the school, where minds are shaped, failed and failed woefully!

efficiencie:


It then makes me ask the question: of what use is our educational system, if it cannot train people to take up meaningful roles in the society? Is it not better we shut these certificate production and sales centres and build real schools?

Believe me people have propounded this theory, but the powers that be frustrates their plan.

Appliedmaths:



Believe me people have propounded this theory, but the powers that be frustrates their plan.

Powers that be? Ordinary Nigerians are the reason the educational system is not working in Nigeria...Nigerian Universities today are no where close in academic quality to the schools in the era of Aristotle and Socrates when there were no modern laboratories, no huge building, no infrastructure...Ordinary Nigerians are the reason for the failure of Nigeria. If the primary, secondary and tertiary institution personnel all did the jobs for which they are paid Nigeria would be a better place...However Nigerians do not want to work at all, yet they want billions of naira over night. This is why we have strike after strike yet lecturers do little or nothing towards building the youths of our time...

If Aristotle, Socrates, Pythagoras, Leucipus, Anaximander, Plato and the likes all waited to be paid before they rendered the services they rendered would knowledge have developed to the point it has today...

efficiencie:
Can you imagine that the lecturer who taught me econometrics at UNIBEN, billed me and my classmates 10,000 naira to assist us in estimating econometric models...meaning he knew he did not teach us enough to be able to do it ourselves and guess what, those who did not pay the said fee but went ahead to seek alternative means of estimating their econometric models were deemed not to have submitted their assignments, though they did submit, and they were awarded Fs in the course...

I have known for some time that the worst sets of people in this country are not politicians...but these corrupt teachers, lecturers and school administrators! They forget that the educational institution is the bedrock of every other institution and if the educational institution fails, all other institutions will fail...We have corrupt politicians, corrupt husbands, corrupt wives, corrupt pastors, violent muslims, delinquent childen and irresponsible adults because the institution of the school, where minds are shaped, failed and failed woefully!

Wow I can relate to this...Same Ecostat, you did BSc there too right?

stephano100:
Wow I can relate to this...Same Ecostat, you did BSc there too right?

No! Twas my MSc i did there...

horlawharley:

Agreed...............so how did you came about develping yourself with all those methods you listed above?

I read ehn, i read the detriment of my grades. i read beyond the limits of the course outline and even now there is still a lot for me to learn...and even as at now i know i'm not yet ready for a standard PhD program. My degree of mathematical sophistication is poor and my econometrics is rusty and basic.

After schooling in two Federal Universities, i am sorely disappointed in the academia in this country!

efficiencie:


Powers that be? Ordinary Nigerians are the reason the educational system is not working in Nigeria...Nigerian Universities today are no where close in academic quality to the schools in the era of Aristotle and Socrates when there were no modern laboratories, no huge building, no infrastructure...Ordinary Nigerians are the reason for the failure of Nigeria. If the primary, secondary and tertiary institution personnel all did the jobs for which they are paid Nigeria would be a better place...However Nigerians do not want to work at all, yet they want billions of naira over night. This is why we have strike after strike yet lecturers do little or nothing towards building the youths of our time...

If Aristotle, Socrates, Pythagoras, Leucipus, Anaximander, Plato and the likes all waited to be paid before they rendered the services they rendered would knowledge have developed to the point it has today...

We live in a failed country.

efficiencie:


I read ehn, i read the detriment of my grades. i read beyond the limits of the course outline and even now there is still a lot for me to learn...and even as at now i know i'm not yet ready for a standard PhD program. My degree of mathematical sophistication is poor and my econometrics is rusty and basic.

After schooling in two Federal Universities, i am sorely disappointed in the academia in this country!

Same here, we read to the detriment of our grades but I'm glad I did.

efficiencie:


No! Twas my MSc i did there...

Oh alright.