paper attempts to develop a small size macro-econometric model of Nigeriaís
economy to examine the effects of monetary policy and crude oil price shock on
selected macroeconomic variables through forecasting and simulations. The model
comprises of 19 equations, out of which 12 are behavioral equations, four
identities and three definitional equations. Ordinary Least Square technique is
used to estimate the behavioral equations for the period 1981-2012. The
estimated model parameters are used to perform simulation experiments to
determine the modelís ability to track historical data and to assess the
behavior of the selected macroeconomic variables in response to the changes
(shocks) in selected exogenous variables. The results give insight in the
future path of the main economic variables.
classification numbers: C20, C51, C52, C53, C63, E27, E37
Macroeconometric Model, Nigerian Economy, Forecasting.