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Austerity measures in Nigeria

The Fed. Govt. as well as the CBN are responding to the oil price fall and its attendant consequences. It's expected that recurrent expenditure heads with lower priority to the govt. will be scaled down in the next budget, the CBN has devalued the naira (an act that runs contrary to the liberalization of the FOREX market and funnily enough the IMF endorses it) and raises the MPR and hence interest rates.

Ofcourse the CBN and coordinating minister are bent on:

I. Slowing down capital outflow and encouraging capital inflow (uncovered interest rate parity theorem)

II. Ameliorate declining investor confidence in a risky business environment like Nigeria

III. Protect budgetary provisions (Fiscal replacement hypothesis)

But how do their objectives meet the plight of the more than 50% poor Nigerians.

Your opinions are welcomed!

the aforementioned suggests the presence of a nexus between persistent oil price shocks, monetary policy and aggregate expenditure...this is a researchable issue!

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Impressive thread I must say, I hope fellow economists subscribe, so Mr OP what is your highest qualification if I may ask. # No disrespect.

Appliedmaths:
Impressive thread I must say, I hope fellow economists subscribe, so Mr OP what is your highest qualification if I may ask. # No disrespect.

sadly a bachelor's degree...

efficiencie:


sadly a bachelor's degree...

in economics?

efficiencie:
[size=20]you are welcome to: Nairaland Economics Academy[/size]


Submit your THEORETIC AND ECONOMETRIC PROBLEMS, as they border on your essays and theses in Economics, here and let's analyze them and proffer solutions...

[size=16]We all are teachers and students, learning is for all and by all...[/size]

what is Pareto efficiency?

DEGREE2466:


what is Pareto efficiency?

it's a state where there's no other arrangement of resources that would result in the simultaneous and costless improvement of the utilities of the agents in that state.

technically MRS1(x,y)=MRS2(x,y)=...=MRSn(x,y) for the agents i={1,2,3,...n} and commodities (x,y)

d@s my take o! any contrary views?

for the econometricians, what do you do when a series like broad money supply (M2) obtained from the CBN statistical bulletin is not stationary at level, at first difference and at second difference even after correcting for a linear trend and using a suite of tests - DF, ADF, PP and KPSS

efficiencie:


it's a state where there's no other arrangement of resources that would result in the simultaneous and costless improvement of the utilities of the agents in that state.

technically MRS1(x,y)=MRS2(x,y)=...=MRSn(x,y) for the agents i={1,2,3,...n} and commodities (x,y)

d@s my take o! any contrary views?

sorry you are wrong

it means one party must be worse off

pareto efficiency means a state/condition where someone betters off and someone worse off........ e.g when u receive ur salary of 30k and u gave ur sister 20k for a project.....she enjoys d 20k while u get ur balance reduced to 10k.....she betters off ,u worse off.....

DEGREE2466:


in economics?

yeah sir!

DEGREE2466:


sorry you are wrong

it means one party must be worse off

i'm as right as you are! A state where a SIMULTANEOUS COSTLESS IMPROVEMENT of the utilities of agents in that state is not possible is PARETO EFFICIENT!

If there's a STATE 'U' where a SIMULTANEOUS IMPROVEMENT in A's and B's utilities will be at the cost of B's and A's utilities respectively then the state 'U' is PARETO EFFICIENT!!!

How is the concept of the PARETO EFFICIENCY represented in the EDGEWORTH-BOWLEY BOX DIAGRAM? And how does the concept of PARETO EFFICIENCY apply to a country like Nigeria with high socio-economic inequalities?

efficiencie:


sadly a bachelor's degree...

*Haha* U call BSc sadly? My friend stop the "humility" jare, BSc na him con hard pass d MSc's and Phd's. Its all good though, I'm fully subscribed to your thread.

Getting my hands stained with some chi-square goodness of fit for my project. Economics all the way.

efficiencie:
How is the concept of the PARETO EFFICIENCY represented in the EDGEWORTH-BOWLEY BOX DIAGRAM? And how does the concept of PARETO EFFICIENCY apply to a country like Nigeria with high socio-economic inequalities?

Are you sure BSc is your highest degree in economics? Just saying though, you are indeed correct. But on a platform like this I would advice you to employ simplicity in delivering your answers.

Econometrics! What's ur say on that? # Holla!

Appliedmaths:


*Haha* U call BSc sadly? My friend stop the "humility" jare, BSc na him con hard pass d MSc's and Phd's. Its all good though, I'm fully subscribed to your thread.

Getting my hands stained with some chi-square goodness of fit for my project. Economics all the way.

oh chi-square? What's yur project topic!!!

Appliedmaths:


Are you sure BSc is your highest degree in economics? Just saying though, you are indeed correct. But on a platform like this I would advice you to employ simplicity in delivering your answers.

Econometrics! What's ur say on that? # Holla!

yea Bsc is ma highest tho i attemptd an Msc n had problms...so i'm redoing it...

i'l heed yur advice n b simple a la Occkham's principle!!!

efficiencie:


oh chi-square? What's yur project topic!!!

Street trading and income generation among youths in Benin city. I'm just using chi-square to analyze my questionniare before running the regression. Chapter four, almost done.

Appliedmaths:


[b]Street trading and income generation among youths in Benin city. [/b]I'm just using chi-square to analyze my questionniare before running the regression. Chapter four, almost done.

d@s a great topic! info frm ur topic cn b used for SME policy formulation...that's if our policy makers are sincere at all...what are your objectives!?

efficiencie:
for the econometricians, what do you do when a series like broad money supply (M2) obtained from the CBN statistical bulletin is not stationary at level, at first difference and at second difference even after correcting for a linear trend and using a suite of tests - DF, ADF, PP and KPSS

still waiting for the econometricians,..this is a serious empirical problem. models involving M2 sourced from the CBN bulletin would most definitely encounter this problem...so economic empiricists speak up!

If the keynesian identity 1 holds for naija

Y=C+I+G+X-M ...1

With consumption defined in terms of income and tax

C=c(0)+c(1).(Y-T) ...2
where 0<c(1)<1

With tax partly lump sum and partly proportional

T=t(0)+t(1).Y ...3
where 0<t(1)<1

With investment defined in accordance with the MEI theory and accelerator theory

I=i(0)+i(1).r+i(2).δY ...4
Assuming that δY/Y=g suggesting a constant growth rate 'g'.
i(1)<0, 0<i(2)<1

With government being fiscally profligate such that when Y≥√(g(1)/g(2)), dG/dY≥0 and when Y<√(g(1)/g(2)), dG/dY<0 suggesting that at the threshold when Y*=√(g(1)/g(2)) government behavior changes

G=g(0)+g(1)/Y+g(2).Y
where g(1)>0, g(2)>0 and

Exports is assumed to be oil exports alone and is determined by nominal exchange rate 'e' and international oil price 'P' assuming domestic oil price to be numeraire.

X=x(0)+x(1).e+x(2).P
x(1)>0, x(2)>0

Imports is assumed to be non-oil and is determined by nominal exchange rate and income

M=m(0)+m(1).e+m(2).Y
m(1)<0, m(2)>0

Given the above information:
i. Solve the system for income Y

ii. What effect would a permanent reduction in oil price by: δP=P' have on income Y

iii. How would the consequence of a permanent oil price change of: δP=P' on income affect government spending decisions

efficiencie:


d@s a great topic! info frm ur topic cn b used for SME policy formulation...that's if our policy makers are sincere at all...what are your objectives!?

To critically evaluate the impact of street trading activities as it affects the standard of living among youths practicing the act in Benin City.

Also to examine the factors that influences higher income generation among youth street traders in Benin City.

It's a well known fact that most people go into street trading activities ( which is currently the largest sub-sector of the informal sector) mainly for income generation. But the topic which is a first of its kind in Benin City, provides policy makers with step-by-step technical know how on how to manage the informal sector ( taking street trading as our target value) along side the formal sector efficiently which would rapidly boost the much more talked about economic growth. We are all part of the BIG economy, be it formal or informal. So instead of "isolating" the informal sector and growing the economy at a slow pace, why don't we in-corporate the informal sector to the bigger picture and race to economic growth and development.

efficiencie:
for the econometricians, what do you do when a series like broad money supply (M2) obtained from the CBN statistical bulletin is not stationary at level, at first difference and at second difference even after correcting for a linear trend and using a suite of tests - DF, ADF, PP and KPSS

You don't rush in answering questions of these nature, if a whole ADF test fails Then we need to sitdown and re-strategize. My quick answer would be, log the model and see the result. But wait a minute, money supply this year also depends on the money supply of last year, so we can also lag the Ms variable in the model. These are my quick thoughts though.

Appliedmaths:


To critically evaluate the impact of street trading activities as it affects the standard of living among youths practicing the act in Benin City.

Also to examine the factors that influences higher income generation among youth street traders in Benin City.

It's a well known fact that most people go into street trading activities ( which is currently the largest sub-sector of the informal sector) mainly for income generation. But the topic which is a first of its kind in Benin City, provides policy makers with step-by-step technical know how on how to manage the informal sector ( taking street trading as our target value) along side the formal sector efficiently which would rapidly boost the much more talked about economic growth. We are all part of the BIG economy, be it formal or informal. So instead of "isolating" the informal sector and growing the economy at a slow pace, why don't we in-corporate the informal sector to the bigger picture and race to economic growth and development.

I agree totally sir!

The dualistic nature of our economy coupled with the poor infrastructural base - human capital, social capital, functional judicial system, property rights protection etc - makes it pertinent that we grow the informal sector and evolve strategies to integrate their activities into the mainstream economy.

Your research work is profound and relevant, if only our Okonjo Iweala's and Emefiele's will see it and act on it sincerely!

Appliedmaths:


You don't rush in answering questions of these nature, if a whole ADF test fails Then we need to sitdown and re-strategize. My quick answer would be, log the model and see the result. But wait a minute, money supply this year also depends on the money supply of last year, so we can also lag the Ms variable in the model. These are my quick thoughts though.

yea M2 has a unique autoregressive scheme that makes me wonder if the M2 data was constructed and not measured...i don't trust the CBN's and NBS's integrity as i believe their data are driven by political objectives...

I tried al ur suggestns 2 no avail. i logged, changed the lag order of the augmented component of d ADF equation and tried othr tests bt yt M2 wasn't even stationary at 3rd difference...

i'm suspectin d presence of a NON-LINEAR TREND!!!

efficiencie:
If the keynesian identity 1 holds for naija

Y=C+I+G+X-M ...1

With consumption defined in terms of income and tax

C=c(0)+c(1).(Y-T) ...2
where 0<c(1)<1

With tax partly lump sum and partly proportional

T=t(0)+t(1).Y ...3
where 0<t(1)<1

With investment defined in accordance with the MEI theory and accelerator theory

I=i(0)+i(1).r+i(2).δY ...4
Assuming that δY/Y=g suggesting a constant growth rate 'g'.
i(1)<0, 0<i(2)<1

With government being fiscally profligate such that when Y≥√(g(1)/g(2)), dG/dY≥0 and when Y<√(g(1)/g(2)), dG/dY<0 suggesting that at the threshold when Y*=√(g(1)/g(2)) government behavior changes

G=g(0)+g(1)/Y+g(2).Y
where g(1)>0, g(2)>0 and

Exports is assumed to be oil exports alone and is determined by nominal exchange rate 'e' and international oil price 'P' assuming domestic oil price to be numeraire.

X=x(0)+x(1).e+x(2).P
x(1)>0, x(2)>0

Imports is assumed to be non-oil and is determined by nominal exchange rate and income

M=m(0)+m(1).e+m(2).Y
m(1)<0, m(2)>0

Given the above information:
i. Solve the system for income Y

ii. What effect would a permanent reduction in oil price by: δP=P' have on income Y

iii. How would the consequence of a permanent oil price change of: δP=P' on income affect government spending decisions

...anybody attempting this...

Of what use is GROWTH to Nigeria if it is not DEVELOPING? Of what use is a 510 billion dollars GDP if it accounts for 13 percent of global maternal mortality, 10.5 percent infant mortality rate, 60 percent youth unemployment rate...to mention but a few dismal indicators...Nigerian economists need to change the way they do economics...

efficiencie:
Of what use is GROWTH to Nigeria if it is not DEVELOPING? Of what use is a 510 billion dollars GDP if it accounts for 13 percent of global maternal mortality, 10.5 percent infant mortality rate, 60 percent youth unemployment rate...to mention but a few dismal indicators...Nigerian economists need to change the way they do economics...

It is no longer news that our development indicators (data) are skewed for what whatever reason mostly political. That's why I encourage working with primary data. When you use a skewed sat of GDP data for policy simulation, my friend you are JONZING you self and the gullible masses.

But sadly the skewed data has become widely accepted and celebrated. Data collection and analyzing technique(s) ought to be reviewed.