{"title":"Exploring the implications of FOREX restriction policies: Theory and new evidence","authors":"Lawrence Ogbeifun , Olatunji Shobande","doi":"10.1016/j.rie.2025.101033","DOIUrl":null,"url":null,"abstract":"<div><div>This paper examines the economic effects of foreign exchange (FOREX) restriction policy in Nigeria, using a new dataset from 2009 to 2019. Using the synthetic control method (SCM), we find that, after the policy implementation, Nigeria’s per capita GDP reduced by an average of $175.72 while inflation increased by 6.3% from 2015 to 2019 compared to the synthetic control countries without such policy. Regarding the restricted items, our results indicate that the policy led to a decrease in the trade value of imported items, except for imported processed vegetables. Furthermore, our analysis emphasizes that while the FOREX restriction policy appears to align with the Central Bank’s objective of reducing the importation of domestically producible items, it also sheds light on the consequential impacts of such policies. The observed decline in GDP per capita and the complex pattern of inflation highlight the need for a sophisticated and adaptable policy strategy. Policymakers should pay close attention to the macroeconomic dynamics and promote stability and growth in the face of changing economic conditions.</div></div>","PeriodicalId":46094,"journal":{"name":"Research in Economics","volume":"79 3","pages":"Article 101033"},"PeriodicalIF":1.2000,"publicationDate":"2025-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in Economics","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1090944325000109","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This paper examines the economic effects of foreign exchange (FOREX) restriction policy in Nigeria, using a new dataset from 2009 to 2019. Using the synthetic control method (SCM), we find that, after the policy implementation, Nigeria’s per capita GDP reduced by an average of $175.72 while inflation increased by 6.3% from 2015 to 2019 compared to the synthetic control countries without such policy. Regarding the restricted items, our results indicate that the policy led to a decrease in the trade value of imported items, except for imported processed vegetables. Furthermore, our analysis emphasizes that while the FOREX restriction policy appears to align with the Central Bank’s objective of reducing the importation of domestically producible items, it also sheds light on the consequential impacts of such policies. The observed decline in GDP per capita and the complex pattern of inflation highlight the need for a sophisticated and adaptable policy strategy. Policymakers should pay close attention to the macroeconomic dynamics and promote stability and growth in the face of changing economic conditions.
期刊介绍：
Established in 1947, Research in Economics is one of the oldest general-interest economics journals in the world and the main one among those based in Italy. The purpose of the journal is to select original theoretical and empirical articles that will have high impact on the debate in the social sciences; since 1947, it has published important research contributions on a wide range of topics. A summary of our editorial policy is this: the editors make a preliminary assessment of whether the results of a paper, if correct, are worth publishing. If so one of the associate editors reviews the paper: from the reviewer we expect to learn if the paper is understandable and coherent and - within reasonable bounds - the results are correct. We believe that long lags in publication and multiple demands for revision simply slow scientific progress. Our goal is to provide you a definitive answer within one month of submission. We give the editors one week to judge the overall contribution and if acceptable send your paper to an associate editor. We expect the associate editor to provide a more detailed evaluation within three weeks so that the editors can make a final decision before the month expires. In the (rare) case of a revision we allow four months and in the case of conditional acceptance we allow two months to submit the final version. In both cases we expect a cover letter explaining how you met the requirements. For conditional acceptance the editors will verify that the requirements were met. In the case of revision the original associate editor will do so. If the revision cannot be at least conditionally accepted it is rejected: there is no second revision.
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