BUSINESS CYCLE SYNCHRONIZATION: THE RELATIONSHIP BETWEEN NIGERIA AND INDIA


Ibrahim Nurudeen, Murtala Muhammad Rabah
1.Department of Economics, Shehu Shagri University of Education, Sokoto, 2.Department of Economics, SSCOE, Sokoto State, Nigeria
Abstract
This study assesses the business cycle synchronization of India and Nigeria being trading partners for a long time. The synchronization if any could lead to spill over effect of economic disturbances between the two countries. The study uses one proxy variable for the Nigerian as well as Indian economy. Two Exogenous shocks are included in the VAR system, the crude oil prices and world GDP. The data spanned from 1980 until 2023. The responses of the two economies due to oil and world GDP shocks shows the two countries responded differently, which implies that these two countries may not respond to exogenous shocks at the same time. The business cycles of the two countries have been assessed through the variance decomposition and thus, the result shows the evidence of synchronization in only crude oil price shock. However, there is absence of co-movement between the two countries as result the world GDP shock. This implies that macroeconomic disturbances of Indian economy could affect Nigeria whenever there is a crude oil shock and vice versa. However, a similar study by Nurudeen and Rabah(2025) couldn’t find synchronization between the two countries using Global VAR framework. Thus, crude oil price is a potential factor that may connect the two nations.
Keywords:
Journal Name :
International Journal of Indian Economic Light(JIEL)

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Published on : 2025-08-18

Vol : 13
Issue : 6
Month : August
Year : 2025
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