Economic diversification entails the process of reducing dependence on single source of income or output generation. The basic idea behind economic diversification, therefore, is to develop the kind of diverse sectors that make significant value addition in an economy rather than relying on a single sector. It is in this backdrop that the present study is articulated to shed light on the pattern of economic diversification among the countries of the Middle Eastern region. The present paper employed two measures of diversification such as share of employment and value added of a particular sector in Gross Value Added over the period 1970-2016. The study has found that the region as a whole is witnessing economic diversification in terms of both the criterions at a moderate speed. Dynamic tradeable sectors should be developed in order to enhance the pace of economic diversification to strengthen macro-economy.
REVIEW ARTICLE | Feb. 27, 2020
Foreign Exchange Rate and Consumer Price Changes in the Nigerian Economy
This study examines the interactions between the general price level and foreign exchange rate in Nigeria. This was aimed at ascertaining if inflation was imported via the foreign exchange rate in Nigeria. The theoretical underpinning of this study was anchored on the purchasing power parity theory. The ex-post facto research design was adopted to observe the study variables in retrospect. Thus, historical data covering 1990 to 2018 was collated and estimated employing the error correction technique. The test results indicates that foreign exchange rate exert a positive and insignificant influence on the level of inflation in Nigeria. This stand to suggest that a benign level of change in the general price level is caused by imported inflation. Evidence further indicates that lending interest rate exerts a negative and significant impact on the level of inflation in Nigeria. The study concludes that persistent increase in foreign exchange rate stimulate increase in the general price level, whilst that of the lending interest rate has no bearing on the general price level in Nigeria. The policy implication of this is for the monetary authorities to ensure foreign exchange rate stability to avoid imported inflation. Also, the lending interest rate be made attractive enough to drive aggregate demand and not too unattractive to slow down aggregate demand. The study therefore recommends a stable and strong international and domestic value of the naira via a policy of stability.
Scholars Middle East Publishers
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