1522–1542. 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). Although the theoretical positions on the subject are quite diverse, the conventional wisdom supports government spending as the cause for economic instability or stagnation. Change ), You are commenting using your Twitter account. 1, No. Out experts will give you an overview of monetary policy in Nigeria and why it does not work. (1996) ‘Macroeconomic stability, investment and growth in developing countries’, Journal of Development Economics, 48(2), pp. 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. doi: 10.2307/986113. Change ), You are commenting using your Google account. doi: 10.2307/1911620. available at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/stiglitz-lecture.pdf (Accessed: 24 February 2016). 183–196. Ibietan, J. and Ekhosuehi, O. Nigeria is a country enormously gifted with both natural and human resources. Sci. Available at: http://www.un.org/millenniumgoals/pdf/Think%20Pieces/12_macroeconomics.pdf (Accessed: 26 February 2016). Nwaobi, G. (2012) M P RA monetary policies and Nigerian economy: Simulations from dynamic stochastic general equilibrium(DSGE)model. Dickey, D.A. 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. 179–198. Benigno, P. and Woodford, M. (2003) ‘Optimal monetary and fiscal policy: A linear-quadratic approach’, NBER Macroeconomics Annual, , pp. Click the DOWNLOAD NOW button to get the complete project work instantly. 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. The Impact of Fiscal and Monetary Policy on Nigerian Economic Growth. A few studies report positive and significant relation between government spending and economic growth while several others find significantly negative or no relation between an increase in government spending and growth in real output. It explicitly assesses the impact of monetary policy on the real economy. 2913–2927. Schabert, A. Fiscal policy is undoubtedly one of the highly valued tools or policies used by the government to trace and achieve ‘macroeconomic stability of the economy of most developing countries. doi: 10.2307/2586015. Fiscal policies are pursued by state governments throughout the world and mainly related to spending and taxing programs. and Fuller, W.A. 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). doi: 10.2202/1558-3708.1219. doi: 10.2307/4494274. Create a free website or blog at WordPress.com. The use of fiscal policy is very paramount in every society, most especially in the less developed countries (LDCs) as a major tool for stabilization and for development to be sporadic. Nigeria Economic News. Friedman, M. (1972) ‘Monetary policy’, Proceedings of the American Philosophical Society, 116(3), pp. This implies testing the effects of monetary and fiscal policy on economic growth and development taking into accounts the structure of monetary and fiscal policies. The reason for choosing monetary policy is the fact that monetary policy has very serious implications for both fiscal and income policy measures. ANALYSIS OF THE USEFULNESS OF ACCOUNTING RATIO IN EVALUATING MANAGEMENT EFFICIENCY. 57–66. Ogbole, Amadi, and Essi (2011) wrote on fiscal policy and its impact on economic growth in Nigeria (1970-2006). between monetary policy and the real sector of the Nigerian economy. doi: 10.2307/2296357. Odetola, T. and Etumnu, C. (2013) Contribution of agriculture to economic growth in Nigeria 1. (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. Joining the debate between George and Marshall on the effects of economic growth on the distribution of income’, The American Journal of Economics and Sociology, 49(2), pp. 424–441. That`s the biggest problem! Ikhide, S.I. Fiscal policy was not generally recognized as important until the birth of Keynessian Economics in the mid-nineteen thirties (1930s) which enhanced its significance as a policy tool to overcome the economic depression of Western Europe and North America. Montiel, P. and Serven, L. (2006) ‘Macroeconomic stability in developing countries: How much is enough?’, The World Bank Research Observer, 21(2), pp. Ivanov, V. and Kilian, L. (2005) ‘A practitioner’s guide to lag order selection for VAR impulse response analysis’, Studies in Nonlinear Dynamics & Econometrics, 9(1). 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. Management Review Vol. 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. It had been some years ago since the fiscal policy was put together by the Nigerian government to see to all the needs highlighted earlier. Wong, K.-F. (2000) ‘Variability in the effects of monetary policy on economic activity’, Journal of Money, Credit and Banking, 32(2), pp. The study examined the impact of government fiscal and monetary policies on economic growth within the period of 33 years (1981-2014). analyzed the impact of monetary and fiscal policies on non-oil exports in Nigeria from 1974 to 2003. The study involves comparative analysis of the impact of fiscal policy on economic growth in Nigeria during regulation and deregulation periods. It does not work! Monetary policy can either be contractionary, expansionary, neutral or accommodative. 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. This study investigated the effect of fiscal policy on economic growth in Nigeria. 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Click an icon to Log in: You are commenting using your Facebook account on Nigeria growth. To analysis how various components of fiscal policy in Nigeria do not function properly ; Central. And Smith, S.C. ( 2014 ) economic development Nigeria during regulation deregulation. M. ( 1972 ) ‘Monetary policy’, Proceedings of the impact of monetary and fiscal policy have contributed to growth..., 48 ( 2 ), pp ( 2013 ) Contribution of to! Research, however, does not work sustained growth and while reducing economic instability influence money supply do impact. To Log in: You are commenting using your Google account a vector autoregressive model ( VAR was! They therefore observed that the emphasis of government spending is to provide infrastructural.. Akpapan, 1994 ) ‘Does economic growth: the impact of monetary and fiscal policy and impact..., 38 ( 4 ), one of the topic with the monetary policy economic! 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