Following the aftermath of the Great Economic Depression of the 1930s that culminated in the birth of the Keynesian Economics School of thought, the attention of a significant number of nations has been drawn to the relevance of government involvement in stabilizing and regulating aggregates of the general economy. That development was in contrast to the prevailing classical view about the working principles of the invisible hands of demand and supply that interplay to create necessary adjustments in relation to output determination and employment (Johnson et al. 2001; Shaikh 2009; Backhouse 2015). There are two major categories of economic policies that have been widely utilized over a vast period of time for the general purpose of economic stabilization and for the achievement of some essential macroeconomic goals and objectives in specific terms. These policies are fiscal and monetary. Although the two policies are different
The activities of micro small and medium-sized enterprises (MSMEs) are crucial to combating the menace of unemployment towards the actualization of the Sustainable Development Goals (SDGs) in African. However, financial constraints and infrastructural deficits are conspicuous issues among the numerous challenges confronting MSMEs’ activities in many developing nations. Hence, this study explores the challenges and the impacts of MSMEs’ contributions to GDP on the unemployment level in Nigeria as Africa’s most populous country. The empirical results from the study using annual time series data (1985-2018) reveal that a rise in MSMEs’ activities vis-à-vis their contributions to GDP in 5 major economic sectors (agriculture, trade, accommodation, manufacturing, and other services) alongside the financial support given to them, have significant impacts on stemming the level of unemployment in the Nigerian economy. Contrastively, the cost of accessing credit by MSMEs significantly exasperates unemployment while the impacts of the level of infrastructural investments by the government were found to be insignificant in reducing unemployment in the country over the reviewed period. In practical terms, the findings suggest that while ensuring adequate provision of financial support to MSMEs, cogent efforts should be concurrently geared toward the implementation of sufficient budgetary allocations for investment in critical infrastructures like electricity, transport, and ICT facilities to boost MSMEs’ activities to proactively address the unemployment menace in Nigeria.
The main purpose of this study is to examine the relationship between natural resources revenue, fiscal policy and economic growth for 35 selected Sub-Saharan African countries. The panel data covering the periods of 1986-2014 was analyzed by using the fixed/random effect model estimation and the panel causality test. We also performed the panel unit root test in order to insure that our variables are stationary. The empirical results indicate that there is insignificant negative effect of natural resources revenue and bad fiscal policy on the economic growth. However, there is significant positive effect of capital formation on economic growth. We also found a bidirectional causality relationship between Natural resources rents and economic growth. There is also unidirectional causality link from government final consumption expenditure to Natural resources revenue and from Natural resources revenue to capital formation. These empirical results mean that Sub-Saharan African countries apply bad fiscal policy to improve the natural resource sector which does not efficiently contribute to the economic growth. This study suggests that countries of Sub-Saharan Africa must apply improved fiscal policy in order to add tax revenue to their total revenue; and they must also use the natural resources revenue in order to invest in other sectors such as education, manufacturing and agriculture.
The impact of tax policy and tax structure on national saving level is an important question for both macroeconomic stabilization and growth purposes, for especially developing countries. This paper examines the impact of tax structure on domestic saving for Turkey through cointegration and vector error correction models from 1965-2011 annual data. The results indicate that there are unidirectional Granger causalities to domestic saving from variables on tax for short-run coefficients. For the long-run, taxes on income as a share of total tax revenue found to be having negative impact on domestic saving, while the ratio of consumption taxes to total tax revenue found to be having negative impact on domestic saving. While the results are consistent with theoretical literature, they may be expected to contribute to empirical discussion of design the tax policy on developing countries and Turkey where do not have enough empirical finding in the field.
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