Macroeconomic fluctuations,regime switching(structural breaks) and impulse responses:Nigerian evidence

While the global economic recovery continues, it remains uneven and subject to downside risks. Yet,to the extent that these linger, they could undermine growth further and foster larger macroeconomic imbalances.In fact,one unwanted characteristics that most Sub-saharan African economies share, is the prevalence and magnitude of output collapses. Unfortunately, research into output collapses remains largely unexplored and much of the focus of growth studies has been on cross-country analysis, ignoring the volatility of growth patherns. This paper therefore intends to show that the hypothesis of a common stochastic productivity trend have a set of econometric implications that allow us to test for its presence,measure its importance and extract estimates of its realized value. Distinctively, we propose to contribute to the current modelling literature by accomodating regime switching and structural break dynamics in a unified framework so as to provide a fuller understanding of the factors underlying the bulk of economic fluctuations in Nigeria.