Domestic Macroeconomic Policies and Capital Flight from Nigeria: Evidence from a Macro-econometric Model
نویسنده
چکیده
There is no scarcity of empirical studies into the causes of capital flight or the associated attempt to relate the phenomenon to economic growth and other macroeconomic stability indicators. Studies that undertook that include Onwuoduokit, (2002), Ajayi (1992, 2002) Pastor (1990), among others. The emerging list of causal variables is equally diverse ranging from balance of payments disequilibrium and real exchange rate distortions to political risks and other social imbalances. Expectedly too, different works place different premia and weights on different causal variables. Indeed, distilling from the menu of variables that influence capital flight will continue to be a major challenge to macroeconomic researchers. However, there is still intense debate on how effective or otherwise domestic fiscal and monetary policies can be in reducing capital flight, either through impacting on its causes or by directly influencing capital flows. This work aims to contribute to this debate for a typical developing country. It proposes a macroeconomic model with the intent first of empirically evaluating the place of risk in capital movements and, thereafter, to evaluate the effectiveness of domestic fiscal and monetary policies in combating capital flight. It found evidence in support of risk and volatility influencing the outflow of capital and of capital flight responding directly to capital controls, but could not find evidence to support indirect control of capital flight using fiscal and monetary policies to control uncertainty.
منابع مشابه
The Effect of Ease of Doing Business on Capital Flight: Evidence from East Asian Countries
T he business environment is characterized by environmental and exogenous factors that affect company performance to the extent that it prevents managers from interacting effectively with a company. This study built on the literature on the ease of doing business and capital flight by empirically demonstrating the importance of business environments across different countries. To thi...
متن کاملOutput Loss from Sudden Stop of FDI and the Role of Macroeconomic Policies
Generally, international flows of capital and foreign direct investment attraction are challengeable issues in the literature of economic growth and development in emerging market countries. However, the fluctuations in foreign direct investment, including sudden flood and stop, will affect emerging markets' output and macroeconomic variables. Using an econometric model with unbalanced panel da...
متن کاملCapital Flight and Economic Growth in Iran
Beginning in the mid-1980s, the phenomenon of capital flight from developing countries received considerable attention in the economics literature. Capital flight destroys the domestic macroeconomic environment and decreases transparency and accountability. It restricts financial resources when a country is looking for economic growth and development. The purpose of this article is to measure t...
متن کاملDesigning a Dynamic Macro Econometric Model for the Iranian economy with Emphasizing on dynamics of the National Development Fund
Oil Revenue Management (ORM) has always been one of the key challenges facing the oil rich developing countries. In this regard, the main objective of this paper is to provide a dynamic macroeconometric model adapted to the state of the Iranian economy. Also, the assessment of the dynamics of the National Development Fund (NDF) and its impact on macroeconomic variables are discussed. The result...
متن کاملMacroprudential Policy Arrangement for Achieving Financial Stability in an Oil-exporting Economy: A DSGE approach
Following the 2008 financial crisis, the application of macro-prudential policies has expanded to ensure financial stability. In addition, in most oil-exporting economies, oil revenues are an important source of fluctuations in macroeconomic variables and, therefore, calls for the use of macroeconomic stabilization policies. Considering the vulnerability of financial stability in the Iranian ec...
متن کامل