Rice trade policy and productivity: empirical evidence from Nigeria’s Rice sub-sector

Low productivity, modest production and large-scale importation characterize Nigeria’s rice subsector despite government intervention through trade policy measures since independence. Studies on Nigeria’s trade policy and rice productivity are scanty in the literature. Therefore, this study investigated the effect of the country’s rice trade policy on rice productivity from 1961-2017, employing the Vector Error Correction Modeling approach. The results show that protectionist trade policy reduced rice productivity in the short run but was not significant in the long run. Producer price and domestic consumption improved rice productivity in the short run although, the latter reduced productivity in the long run. Similarly, fertilizer consumption and exchange rate reduced productivity in the short run but exchange rate increased productivity in the long run. Thus, government should focus on exchange rate, liberalized trade policy and appropriate fertilizer policy to improve Nigeria’s rice productivity.

CO-INTEGRATION AND ERROR CORRECTION MODELING OF AGRICULTURAL OUTPUT: THE CASE OF CASSAVA IN ONDO STATE, NIGERIA

Cassava is an important food crop in Nigeria providing households food security and income. Cassava production has received government and stakeholders’ intervention dating back to the 1970s. Nevertheless, increased and sustainable production of the crop is under threat by exogenous factors of climate change and variability. This study investigates this concern by assessing the effects of climate change on cassava output in Ondo state, Nigerian using Co-integration and Error-Correction Modelling (ECM). Time series (1971-2010) data were sourced from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) Abuja, Nigerian Meteorological Agency Oshodi, Lagos. The results of the Augmented Dickey-Fuller (ADF) test revealed that all variables (cassava yield and climate variables; rainfall, temperature, and relative humidity) all have unit root problems (non-stationary) but become stationary after the first difference 1(1). The results confirmed a long-run equilibrium relationship between all identified variables as the absolute values of the variables are greater than their critical values at a 5% level of significance for both trace statistics and maximal-eigen values. The ECM result shows that rainfall exerts a positive effect, while temperature and relative humidity exert negative effects on cassava production. This indicates the sensitivity of cassava to climate change in the study area. Thus, increased and sustained production of cassava for household’s food security income would be attainable by designing programmes and policies geared toward reducing the effect of climate change. Keywords: Co-integration, Error-Correction Modeling, Cassava Output, Climate Variability, Nigeria.

On the link between policy uncertainty and housing permits: asymmetric evidence from state-level data in the USA

Purpose The purpose of this study is to assess the symmetric and asymmetric impact of a measure of policy uncertainty on house permits issued in each state of the USA. Design/methodology/approach To assess the symmetric effects, the authors use Pesaran et al.’s (2001) linear autoregressive distributed lag (ARDL) approach to error-correction modeling. To assess the asymmetric effects, they rely upon Shin et al.’s (2014) nonlinear ARDL approach to error-correction modeling. Both approaches have the advantage of producing short-run and long-run effects in one step. Findings The authors find short-run symmetric effects of policy uncertainty on house permits issued in 22 states that lasted into the long run in three states only. However, the numbers were much higher when they estimated the possibility of asymmetric effects of policy uncertainty. Indeed, they found short-run asymmetric effects in 38 states and long-run asymmetric effects in 18 states. Originality/value Some previous studies assessed the effects of a measure of policy uncertainty on house prices. In this paper, the authors extend the same analysis to the supply side of the housing market by assessing the effects of policy uncertainty on house permits in each state of the USA.

NONLINEAR ARDL APPROACH AND PPP: EVIDENCE FROM 82 COUNTRIES

Since the introduction of asymmetric cointegration and error-correction modeling, old theories have been getting a renewed attention, and purchasing power parity theory (PPP) is no exception. In this paper, we revisit the PPP by applying this relatively new technique. When we applied the symmetric cointegration test of Pesaran et al. [Pesaran, MH, Y Shin and RJ Smith (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326], we found cointegration between the nominal exchange rate and relative prices in 22 out of 82 countries. However, application of the asymmetric cointegration method of Shin et al. [Shin, Y, B Yu and M Greenwood-Nimmo (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In R. Sickels and W. Horrace (eds.), Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, pp. 281–314. New York: Springer] increased the number to 51 out of 82 countries. Nonlinear adjustment of relative prices was said to be the main contributing factor.

Dynamics between Vietnamese real consumption and economic growth

This article uses recent developments in econometric techniques to examine the consumption-led growth hypothesis for Vietnam from 1990–2012. The Granger-causality tests were based on two testing approaches: the vector error correction modeling approach outlined in Toda and Philips, and the augmented level VAR modeling with integrated and cointegrated processes (of arbitrary orders) separately introduced by Toda and Yamamoto (1993) and Dolado and Lütkepohl (1996). Empirical results reveal the mutual exogeneity between the Vietnamese real consumption and GDP growth. This exogeneity poses great challenges for the Vietnamese policymakers who must rebalance their transitional economy. This change, necessitated by recent crises in the international economic landscape, necessitates a shift in the Vietnamese economy from an export-led growth economy to a more inclusive, services-oriented, and consumer-based.

Macroeconomic Determinants of Consumption Inequality in Nigeria: Does Agricultural Productivity Matter?

The paper examines the effect of agricultural productivity and other macroeconomic variables on consumption inequality in Nigeria. The ARDL approach to cointegration and error correction modeling was employed for the analysis. The study found that agricultural productivity and domestic investment reduce consumption inequality in the long run. FDI was also found to be associated with reduction in consumption inequality in the short run, but its long run effect was not statistically significant. Based on the evidence, the study recommends as measure to reduce consumption inequality in the country, increased investment in the agriculture sector to enhance its productivity, and improvement in the investment environment through infrastructural development, including energy, road, telecommunication infrastructure, favourable, tax policies, enhanced national security, etc. to encourage domestic investment and enhance the attractiveness of the economy to FDI.

Asymmetry cointegration and the J-curve: new evidence from Africa

PurposeThe purpose is to assess the asymmetric effects of exchange rate changes on the trade balance using data from African nations.Design/methodology/approachThe methodology is based on the most recent development in asymmetry cointegration and error-correction modeling.FindingsWhile the authors find short-run asymmetric effects in many of the countries in their sample, asymmetry cointegration yields support for the new definition of the J-curve in Algeria, Cameroon, Ethiopia, Morocco, Tanzania and Zambia.Originality/valueThis is the first study that applies nonlinear ARDL approach of Shin et al. (2014) using data from each of the 13 countries in Africa.

Relationship between sectoral exports and economic growth - A vector error correction modeling for Vietnamese fishery sector 1997 – 2008

Numerous literatures have documented the relationship between exports and economic growth of a nation but not so many on the one between exports of an economic sector and national growth. This paper examines the latter relationship with evidence from fishery exports of Vietnam during 1997 to 2008. The contribution of fishery sector in Vietnamese Gross Domestic Products (GDP) may be mathematically calculated with statistical figures. However, the effects of fishery exports on the economic growth are yet to be thoroughly studied in an econometric approach. An econometric approach with stationary and co-integration tests and vector error correction models used in this study allows forecasting a persistence of the effects of fishery exports on Vietnamese GDP despite of different seasonal business. For the long run estimation, a double increase in national fishery exports revenue would raise the GDP by 7%. This has a great economic meaning in developing process of Vietnamese economy. In reverse direction, Vietnamese fishery exports would increase by 5.2% with a 10% increase in its GDP. Confirming the role of fishery exports in national economic growth, it is necessary for the sector to improve its competitive capacity.