The first issue of the 5th Volume of the DBN Journal of Economics and Sustainable Growth presents four articles with diverse themes ranging from Examining the Response of Inflation to the Boom-Bust Cycle of Oil Price: Evidence from Nigeria; Foreign Direct Investment, Trade Openness, and Industrial Sector Employment in Nigeria; the Effect of Global Value Chains (GVC) on Employment in Nigeria; and finally, a Review of Risk Preferences and Beliefs in Shaping Household Financial Decisions.
The first article, titled, Examining the Response of Inflation to the Boom-Bust Cycle of Oil Price: Evidence from Nigeria, investigates the (a)symmetric response of inflation in Nigeria to the boom-and-bust cycle of oil price in the framework of the linear autoregressive distributed lag (ARDL) and non-linear ARDL models respectively. From the findings, the result of the ARDL model showed no evidence that changes in oil prices significantly affect inflation. However, the results of the NARDL model suggest that positive changes in oil prices have positive and significant effects on inflation. In contrast, negative changes in oil prices yield insignificant negative results in almost all the specifications.
In the second article, titled, Foreign Direct Investment, Trade Openness, and Industrial Sector Employment in Nigeria, the authors examine the employment effects of FDI and trade openness in Nigeria’s industrial sector during the period 1991-2020 using the ARDL approach to cointegration and error correction modelling (ECM). From the result of the findings, the result showed that FDI and trade openness adversely affect industrial sector employment in the short and long run. The study gives further evidence to show that industrial sector employment is adversely affected by real exchange rate appreciation.
TThe third article on the Effect of Global Value Chains (GVC) on Employment in Nigeria examined the GVC participation employment impacts along with different economic sectors, including the agricultural, industrial, and services sectors. The study employed the Dynamic Ordinary Least Squares regression model for the estimation. From the results of the findings, the result showed that only backward GVC participation contributes positively to total employment. At sectoral levels, industrial sector employment benefited from the total, forward and backward GVC participation, while agricultural sector employment only benefits from total and forward GVC participation. However, no evidence showed that services sector employment benefits from GVC participation.
The author of the fourth article on a Review of Risk Preferences and Beliefs in Shaping Household Financial Decisions investigated the overview of household finance with respect to the determinants of the composition of household assets and liabilities, risk preferences and beliefs. The findings showed that household assets and liabilities are driven by risk preferences, beliefs or expectations and other factors. Household assets consist of human capital and tangible assets. Tangible assets consist of real assets and financial assets. Risk preference is sensitive to wealth levels, consumption commitments, gender, intellectual ability, background risk, past experiences, age, and other personal attributes of households.
I welcome policymakers, researchers, operators in the MSME ecosystem and all interested parties to read this issue and past issues of the DBN Journal of Economics and Sustainable Growth