Pages: (15-35 )
Abstract
This study investigated the impact of crude oil price fluctuations on macroeconomic variables in Nigeria for the period of 1987 – 2018. The Kydland-Prescott-Hansen RBC model was deployed to create a special disaggregated linear model for Nigeria. The results showed that an increase in crude oil price fluctuation increases unemployment by about 4.9 percent. The result also showed that the effect of crude oil price on RGDP and exchange rate is positive and statistically significant, but negative and significant on inflation and real interest rates on the other hand, the effect of crude oil price on unemployment rate is positive but not statistically significant. Consequently, the study emphasises the need for the policymakers to put in place appropriate measures to stimulate and sustain high growth rate and increased foreign direct investment inflows and job opportunities.
Keywords: Keywords: Real GDP, Interest rate, Exchange rate, Oil price, Kydland-Prescott-Hansen RBC model, ARDL, Midas.,