ABSTRACT
The study evaluated the effects of oil price fluctuations on economic growth in Nigeria. The industrial production index was used as a proxy for gross domestic product that served as a function of oil price, exchange rate and interest rate that are the explanatory variable. The research made used of secondary time series data, The data on industrial production index, exchange rate and interest rate were obtained from the Central Bank of Nigeria Statistical Bulletin while that of oil price were obtained from the United States Energy Information Administration (EIA) from 1986:Q1-2016:Q4 The unit root test was done via ADF test, Phillip Perron test. The study further adopts the NARDL Bounds co integration test since the series are fractionally integrated i.e. integrated of different orders and the result showed that there is a long run relationship between industrial production and the explanatory variables. In the short-run, the study found out that rise in price and interest rates are positively related to growth while fall in oil price and exchange rate are negatively related to growth. The result also showed that the short-run relationships are maintained even in the long-run although with increased magnitude of effects. Furthermore, the Wald Coefficient Restriction test was conducted and the result indicates that there is no asymmetric effect on the oil price-growth nexus. Hence, oil price is said to have a symmetric effect on the Nigeria economic growth.
Keywords: Oil price; Nigeria; Economic growth; NARDL.
