Abstract:
This study investigates the responses of consumer price index (CPI) to crude oil priceshocks in the pre- and post-2008 global financial crisis. The study used the StructuralVector Autoregressive model to analyse monthly data from 2000M01 to 2019M12.The impulse response analysis showed that for pre and post-crisis periods, oil priceshocks have a positive impact on CPI. This impact was an insignificant direct mo-mentary increase in pre-crisis CPI before dissipating. Conversely, the impact onpost crisis CPI response tends to be stable and long-lasting starting from the thirdmonth. The confidence bands for the post crisis CPI are large, indicating the long-lasting positive response in the CPI pose no significant threat to price stability in thelong run horizon. In conclusion, CPI response varies in terms of intensity for pre andpost crisis periods. In terms of level of significance, the effect of the shocks on CPIis transient and insignificant in both periods. The post crisis oil price shock is not asignificant channel that created price instability in Nigeria after the crisis and thisstudy recommend partial deregulation of energy price should be maintained. Estab-lishing oil price -inflation pass-through, external shocks like financial crisis shouldbe accounted for.
