Effects of Fiscal and Monetary Policies on Economic Growth (1990-2017)
CHAPTER ONE
Objectives of the Study
The major objective of this research study is to assess fiscal-monetary policy interaction and growth dynamics in Nigeria. Other specific objectives are:
- To examine the effect of fiscal policy on economic growth in Nigeria.
- To investigate the impact of monetary policy on economic growth in Nigeria.
- To evaluate the degree of causal relation between the key monetary and fiscal variables and economic growth.
CHAPTER TWO
REVIEWED OF REKATED LITERATURE
Introduction
Mishkin (1991) defined the crisis as a disruption of financial markets, in which adverse selection and moral hazard problems become much worse, so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities. Clinton, et al. (2011) concluded that, if a fiscal package is very well designed, then pain only arises if the package suffers from an initial lack of credibility, and the length of the period of pain closely corresponds to the length of the period during which credibility needs to be established. If a fiscal package is designed, the long run gain could be much lower or even non-existent, as higher distortions and/or productivity offset the gains from lower real interest rates. Finance science as an economic science began to develop from the first half of the 19th century. The thoughts of well-known theorists who have dealt with the most financial problems and have presented a finance science development, in addition to the concept and theoretical point of view, which has been foreseen to find both precision and application even in our day or theoretical whether in the practical aspect. Whereas theories in the finance field have begun to be reviewed since the 1930s, to continue with contemporary theorists who made a great contribution to the consideration of this sphere. (Henderson, 2007: 66). We find public finances as a subject of interest to English authors from the 16th to the 19th century and the most renowned representatives are: Hobsi, Loku, Hjumi, Ricicardo and Milli.A large number of studies have focused on the role and impact of fiscal policy both in the theoretical and in the empirical context. In its 2006 publication, in his studies, he states that “fiscal policy can be used to control the production or to stabilize the swing in macroeconomic indicators, which coincides with the short-term monetary policy impacts “(Romer 2006)Also, if we want to see its role in the long run then we say that: fiscal policies and forms of debt financing affect the demand and overall supply of the economy. Viewed from the historical point of view in terms of taxation, Hjumi supports the view that “tax obligations are obliged regardless of the benefits of the state” (Hjumi). While Adam Smith is limited to tax problems. Smith should first point out that he was devoted to reviewing the tax principles, which defines the characteristics and the transfer of taxes. In this controversy David Rickard is considered as the architect of the free market economy. In public finance policy is known for treating the tax system, tax burden, the consequences that cause tax burden, inciting and increasing productivity. On fiscal policy, John Stuart Milli is also limited to tax issues, the principle of tax neutrality. His point was to release the minimum tax on existence, while from the aspect of the tax policy policy it is opposed to taxation with progressive rates
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
It is important to ascertain that the objective of this study was to ascertain Effects Of Fiscal And Monetary Policies On Economic Growth (1990-2017). In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing effects Of Fiscal And Monetary Policies On Economic Growth (1990-2017).
Summary
This study was on effects Of Fiscal And Monetary Policies On Economic Growth (1990-2017). Three objectives were raised which included: To examine the effect of fiscal policy on economic growth in Nigeria, to investigate the impact of monetary policy on economic growth in Nigeria and to evaluate the degree of causal relation between the key monetary and fiscal variables and economic growth. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from CBN, Akwa Ibom state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The goal of this analysis is to establish the effect of fiscal policy on economic growth in Nigeria. For the attainment of the objective, the study uses some economic indicators adopted from the theory used, which includes total government expenditure, population growth, taxation, agriculture, investment, real interest rate, education, foreign direct investment which are components of fiscal policy and also economic growth as real gross domestic product. 36 Two major finding of this study is that government expenditure, taxation and population growth has a significant role in increasing the economic growth of Nigeria. Similarly, there is an insignificant negative relation between education and economic development. It was suggested that low investment in education may have led to this negative relationship between education and economic growth. However, investment in education as a component of fiscal policy should further be investigated in order to justify the above statement.
Recommendation
Based on the results of this research, the following recommendations are presented as follows: Firstly, to ensure efficient growth in the Nigerian economy, there is a need for the government to increase allocation in various sectors rather than focusing on just one sector. This support should be centred on developing fiscal policy. In order to further ensure an uptrend in development of fiscal policy as well as economic growth, Nigerian government should focus on the development of the educational sector by organizing trainings, offering quality teachers, allocating resources and providing infrastructures
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