Effect of the Dynamic Macroeconomic Fluctuation on the Stability of a Banking Network System with Scale-Free Structure

The stability of banking system has caused wide concerns since the global financial crisis. The present paper focuses on studying the stability of a banking network system in the case that the banking network system suffers the dynamic macroeconomic fluctuation shocks. We firstly construct a banking network system with a scale-free structure, then let the banking network system suffer the dynamic macroeconomic fluctuation (here, we consider three kinds of situations; the macro economy fluctuates in downward, upward, and random trends, respectively). Then, we study the stability of the banking network system under each situation. Firstly, the results show that the scale-free topology has an important effect on the stability of the banking network system at each macroeconomic fluctuation situation. Secondly, the investment payback period and the ratio of investment to deposit have a large effect on the stability of the banking network system in the cases of dynamic macroeconomic fluctuation. In addition, our further studies find that there is an optimal ratio of the investment to deposit under various macroeconomic fluctuation scenarios, which divides the banking system into stable and unstable regions. Finally, we discuss the regulation strategies for banks, which may provide decision supports for the relevant regulatory authority.

Oil prices, armed conflict and government revenue in Nigeria

Purpose Persistent wave of armed conflicts – militancy and terrorism – and the mono-cultural structure of the Nigerian economy, as well as extensive reliance on revenue from crude oil, highlights how external vulnerabilities, weakening internal structure and insecurity could significantly exacerbate public revenue loss. Understanding the nature, trend and impact of these factors on government revenue is one of the questions that still remain unsolved. The purpose of this paper is to examine the impact of global oil prices, militancy and terrorism on government revenue in Nigeria. Design/methodology/approach The study focusses on the state-failure and frustration-aggression hypotheses to explain the nature and trend of armed conflicts in Nigeria. The autoregressive distributed lag (ARDL) model is used to examine the effect of global oil prices, militancy and terrorism on government revenue. Findings The study reveals that crude oil price, terrorism and militancy have significant negative effect on government revenue in short- and long-run Nigeria. Evidence from the study therefore supports the theory that macroeconomic fluctuation is largely determined by endogenous and exogenous factors in Nigeria. Research limitations/implications In view of this review, future studies should empirically analyse the interactive impact of militancy, terrorism and global oil prices on government expenditure or a combination of government revenue and expenditure. Originality/value The study provides evidence on the role of internal and external factors on macroeconomic fluctuation, and recommended appropriate suite of policies that could mitigate external and internal vulnerabilities, especially during upsurge in armed conflicts.