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标题：TERMS OF TRADE SHOCKS: A MAJOR CAUSE OF DISTORTION IN THE NIGERIAN ECONOMY
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作者：Benedict I. Ezema ; Uzochukwu Amakom
期刊名称：Asian Journal of Business and Management Sciences
电子版ISSN：2047-2528
出版年度：2012
卷号：1
期号：01
页码：25-38
出版社：Society for Business Research Promotion
摘要：A characteristic common to most of the primary commodity exporting developing countries of Africa including Nigeria is that movement in their terms of trade is a key determinant of macroeconomic performance and has an important impact on real national income. This movement results in terms of trade shocks which is a major source of distortions in such economies. This study is intended to show that terms of trade shocks in Nigeria are high and has impacted negatively on macroeconomic performance. Applying the McCarthy, Neary and Zanalda (1994) model which draws from important literatures on the theory of distortions and welfare, the first null hypothesis of the study which states that adverse terms of trade shocks are not high in Nigeria and do not follows the trend of oil booms and bursts was rejected. The use of McCarthy, Neary and Zanalda (1994) method accepted the second hypothesis which states that the effects of policy adjustments to terms of trade shocks on macroeconomic performance have not adequately reduced the problems associated with such shocks in Nigeria with estimates of the four performance indicators mostly unfavorable for Nigeria. Such findings point to the fact that wrong policy choices and sometimes total lack of policy adjustments as well as poor policy implementations have made it impossible to adequately address the problems associated with terms of trade shocks in Nigeria. The study therefore, recommends that Nigeria should, henceforth, take practical steps to diversify her export and manufacturing bases so as to ameliorate the adverse effects of terms of trade shocks. There is also need for a critical look at the country’s peculiar problems before carefully selecting and engaging policy thrusts that suit the economic environment. This will remove to a large extent the imported distortions in the economy occasioned by unstable oil prices in the international market. Key Words: Terms of Trade shocks, distortion, Nigerian economy Full Text