impact of monetary and fiscal policy in nigeria

It explicitly assesses the impact of monetary policy on the real economy. Wong, K.-F. (2000) ‘Variability in the effects of monetary policy on economic activity’, Journal of Money, Credit and Banking, 32(2), pp. control of inflation using monetary policy measures as adopted by the monetary authorities of the Central Bank. The pool of resources from one end to the other is immeasurable to such an extent that given a vibrant and perceptive fiscal policy, economic growth, development … The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the Nigerian economy. Bleaney, M.F. Finally, the study recommends fiscal policy leadership and harmonization between the fiscal and monetary authority, with emphasis on channelling resources to where they are most needed. This study investigated the impact of fiscal and monetary policy on Nigerian economic growth from 1981 to 2015, with the interest in exploring which of fiscal or monetary policy has been effective in propelling economic growth in Nigeria and how GDP growth responds to the monetary and fiscal policy shock. This study investigated the impact of fiscal and monetary policy on Nigerian economic growth from 1981 to 2015, with the interest in exploring which of fiscal or monetary policy has been effective in propelling economic growth in Nigeria and how GDP growth responds to the monetary and fiscal policy shock. The government will however be able to achieve the desired goal if some controls can be maintained on the currency. Impact of fiscal policy on Nigeria economic growth within the period of 1981-2016. (1996) ‘Macroeconomic stability, investment and growth in developing countries’, Journal of Development Economics, 48(2), pp. Download the complete Economics project topic and material (chapter 1-5) titled IMPACT OF MONETARY AND FISCAL POLICIES ON INFLATION IN NIGERIA here on PROJECTS.ng. & Education, 2(4), pp. Despite the lofty place of fiscal policy in the management of the economy, the Nigerian economy is yet to come on the path of sound growth and development. 151–178. doi: 10.2307/986113. THE IMPACT OF FISCAL POLICY ON THE NIGERIA ECONOMY CHAPTER ONE 1.0INTRODUCTION This investigates the three elements of fiscal policy (1) government spending, taxation and the other source of revenue which finance public spending and the resulting budget deficit or surplus which occurs wherever government expenditure does not exactly equal revenue. The VAR model revealed that fiscal policy distorted real GDP but died out after one year, while monetary policy had no significant impact on real GDP. between monetary policy and the real sector of the Nigerian economy. 1.1 Background to the Study Turnovsky, S.J. Karadimitropoulou, A. and León-Ledesma, M. (2013) ‘World, country, and sector factors in international business cycles’, Journal of Economic Dynamics and Control, 37(12), pp. Park, Y.C. This research examined the effects of monetary and fiscal policies on stock returns in Nigeria. available at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/stiglitz-lecture.pdf (Accessed: 24 February 2016). Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. The positive impact of these policy tools on economic performance will help the country achieve sustained growth and while reducing economic instability. 323–346. According to Morakinyo, David and Alao (2018), the realization of this growth undoubtedly is not automatic but requires policy guidance, which are Fiscal and Monetary policy instruments which are the main instruments of achieving the macroeconomic targets. Since its establishment in 1959, the Central Bank of Nigeria (CBN) has continued to play the traditional role expected of a central bank, which is the regulation of the stock of money in such a way as to promote the social welfare (Ajayi, 1999). 1.5 SIGNIFICANCE OF THE STUDY However, this research work will assist the economy to derive possible solution to the research problem e.g. Nigeria is not enjoying price stability in the least. The pool of resources from one end to the other is immeasurable to such an extent that given a vibrant and perceptive fiscal policy, economic growth, development and prosperity would have been long achieved, (Imoisi, 2013). It is used along with the monetary policy, which the central bank uses to influence money supply in a nation. This paper discusses the evolution of monetary policy in Nigeria in the past four decades. The paper is a current treatise of the topic with the scope spanning 1993 to 2013. Nigeria is a country enormously gifted with both natural and human resources. doi: 10.2307/2296357. Using Ordinary Least Squares estimation, the study revealed that both interest rate and exchange rate, both proxies for monetary policy negatively affect non-oil exports. Dixit, A. and Lambertini, L. (2003) ‘Interactions of commitment and discretion in monetary and fiscal policies’, The American Economic Review, 93(5), pp. (1977) ‘Monetary and fiscal policies under flexible exchange rates and perfect myopic foresight in an inflationary world’, The Scandinavian Journal of Economics, 79(4), pp. DFID (2008) Economic growth: The impact on poverty reduction, inequality, human development and jobs. Create a free website or blog at WordPress.com. The threat of inflation in the immediate post-war years and the desire to maintain continuous full employment following World War II necessitated the use of fiscal policy in these same economies (Agbarakwe, 2018). (Siyan and Debayo, 2015) . Ogbole, Amadi, and Essi (2011) wrote on fiscal policy and its impact on economic growth in Nigeria (1970-2006). doi: 10.2307/3132140. 1522–1542. It does not work! Overall, the socio-economic and political milieu, including the legal framework under which the Central Bank of Nigeria has operated, was found to be the critical factor that influenced the outcome of monetary policy. Todaro, M.P. Available at: http://www.aaawe.org/wp-content/uploads/2015/01/Tolulope_paper_mod.pdf (Accessed: 19 June 2016). ( Log Out /  This study uses secondary data which were obtained from the Statistical Bulletin of the Central Bank of Nigeria (CBN) covering the period from 1985 to 2015. (1981) ‘Likelihood ratio statistics for Autoregressive time series with a unit root’, Econometrica, 49(4), p. 1057. doi: 10.2307/1912517. Although the theoretical positions on the subject are quite diverse, the conventional wisdom supports government spending as the cause for economic instability or stagnation. The researchers utilized ex-post facto research design using the time series data of the annual market values of All Share Index (ASI) of the Nigerian Stock Exchange (NSE). That`s the biggest problem! 1, No. Clark, W.R. and Hallerberg, M. (2000) ‘Mobile capital, domestic institutions, and Electorally induced monetary and fiscal policy’, The American Political Science Review, 94(2), pp. ( Log Out /  ( Log Out /  doi: 10.2307/2096441. significant in reducing the level of unemployment generation in Nigeria than monetary policy measure. They therefore observed that the emphasis of government fiscal actions on the economy has led to a greater distortion of the Nigerian economy. 251–262. Fiscal policy is used in gearing the economy towards achieving a variety of economic transformation such as economic development and growth, price stability, reduction in unemployment, external equilibrium as well as income redistribution (Agbarakwe, 2018). Sci. 186–189. Firstly, a vector autoregressive model (VAR) was applied, and then the vector error correction (VEC) model. Available at: https://www.ids.ac.uk/files/dmfile/Wp68.pdf (Accessed: 15 June 2016). Friedman, M. (1972) ‘Monetary policy’, Proceedings of the American Philosophical Society, 116(3), pp. In Nigeria, monetary policy has been used since central Bank of Nigeria was saddle the responsibility of formulating and implementing monetary policy by Central Bank act of 1958. this role has facilitating the emergence of active money market where treasury bills, a financial instrument used for open market operations and raising debt for government has grown in volume and valued becoming a prominent … The study involves comparative analysis of the impact of fiscal policy on economic growth in Nigeria during regulation and deregulation periods. Montiel, P. and Serven, L. (2006) ‘Macroeconomic stability in developing countries: How much is enough?’, The World Bank Research Observer, 21(2), pp. doi: 10.1016/0304-3878(95)00049-6. Boston, MA: Addison-Wesley. Nigeria is a country enormously gifted with both natural and human resources. Schabert, A. More broadly, in some emerging economies with unsteady financial systems as Nigeria, monetary policy is directly opposite of fiscal policy and plays only an accommodative role. Change ), You are commenting using your Twitter account. Studies by Agiobenebo (2003), Gbosi (2002) and Okona (1997) indicate that the economy is still married by chronic unemployment, rising rate of inflation, dependence on foreign technology, monoculture foreign exchange earnings from crude oil, and more. Despite the lofty place of fiscal policy in the management of the economy, the Nigerian economy is yet to come on the path of sound growth and development. (1970) ‘Monetary policy’, Econometrica, 38(4), pp. It is the means by which a government adjusts its level of spending to monitor and influence a nation’s economy. 424–441. Dickey, D.A. Click the DOWNLOAD NOW button to get the complete project work instantly. 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