Current Account Deficit Dynamics in Kenya: Evidence from Time-series Data (1980-2014)

Mbithi, Stephen Benard; Mutuku, Cyrus

doi:10.9734/jemt/2017/31334

Cited by 2 publications

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“…In Turkey, Yurdakul and Cevher () observed that current account deficit is determined by real effective exchange rate, growth rate, energy import, trade openness and foreign capital investment. So also, Mbithi and Mutuku () confirmed trade openness, fiscal deficit, business cycles, fiscal balance, trade competitiveness, dependency level, stage of economic development and oil prices as the main drivers of current account deficit in Kenya.…”

Section: Literature Reviewmentioning

confidence: 93%

Oil price, trade openness, current account balances and the official exchange rate in Nigeria

et al. 2019

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Since a larger percentage of government revenue are generated from crude oil trade, the fluctuations in the price of oil have always been influencing the budget financing in Nigeria. Also, investment decisions and trade cost are been influenced by the status of the oil price. The study investigates the relationship between oil price, trade openness, current account balances and official exchange rate in Nigeria using secondary data from 1980 through 2016. The non‐linear auto‐regressive distributed lag (NARDL) was used to analyse the short‐run and long‐run link between the variables. From the findings, it was established that in the short run and long run, trade openness negatively impacts on the official exchange rate of naira to dollar in Nigeria. The consumer price index positively and significantly influences exchange rate value in Nigeria in the short run and long run. Positive changes in oil price impacted negatively on official exchange rate in the short run, but in the long run had a positive impact. Negative changes in the price of oil have a positive insignificant and negative significant impact on official exchange rate in the short run and long run, respectively. The error correction result verified that the variables (trade openness, current account, oil price and consumer price index) correct 91 per cent deviations of exchange rate from short‐run equilibrium back to equilibrium in the long run. The study concludes that trade policy in Nigeria is not in favourable direction of official exchange rate in Nigeria. Also, positive changes in oil price and current account balances are strong determinants of the Nigerian official exchange rate of naira to dollar in the long run. Therefore, it is recommended that trade policies should be reviewed in Nigeria towards enhancing other sectors that would add more value to naira.

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Section: Literature Reviewmentioning

confidence: 93%

Oil price, trade openness, current account balances and the official exchange rate in Nigeria

et al. 2019

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“…Similarly, Mbithi and Mutuku (2017), while studying the economy of Kenya, the trade openness, oil prices, fiscal deficit, business fluctuations, trade competitiveness, fiscal balance, reliance level and phase of economic growth are the key element of the current account deficit. Ibhagui (2018) noted that if the boundaries are open for the trade (trade openness) this will lead to the current account deficit because he concluded that trade openness had a negative associated with the current account balance.…”

Section: Ioer International Multidisciplinary Research Journal Vol 2 ...mentioning

confidence: 99%

Does Oil Price and Trade Openness Nexus along with Foreign Direct Investment have Influence on Economic Growth in Thailand

Rahman¹,

Atta²,

Ahmad³

et al. 2020

IMRJ

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The objective of this research is to analyze the conceivable cointegration and direction of causality among the oil price, trade openness, foreign direct investment and the growth rate in Thailand, using the time series data from 1974 to 2018. In addition to these variables’ fiscal development and inflation are also employed to observe the influence of financial openness on economic growth. Johansen cointegration test is utilized to detect long-run relationship incorporated with the vector error correction for the short-term association. Further, granger causality is utilized to determine the direction of causality among the contending variables. The outcomes of Johansen and vector error confirms the short and long-term affiliation among variables in Thailand. The coefficient of VECM (Wald test) detect the cumulative influence on the growth rate. The estimations of granger causality affirmed that oil price, inflation, fiscal development via trade, granger cause the growth rate and the fiscal development and foreign direct investment granger causes the growth rate in bi-direction and uni-direction, respectively. The study suggests, based on the impulse response function (under the consideration of the behavior of variables) government should liberalize trade openness as it fortifies the position of Thailand in the neighbored.

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Current Account Deficit Dynamics in Kenya: Evidence from Time-series Data (1980-2014)

Cited by 2 publications

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Oil price, trade openness, current account balances and the official exchange rate in Nigeria

Oil price, trade openness, current account balances and the official exchange rate in Nigeria

Does Oil Price and Trade Openness Nexus along with Foreign Direct Investment have Influence on Economic Growth in Thailand

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