Monetary and fiscal policy mix in a small open economy: Evidence from Nigeria

Tule, Moses K.; Onipede, Samuel F.; Ebuh, Godday Uwawunkonye

doi:10.1016/j.sciaf.2020.e00346

Cited by 11 publications

(7 citation statements)

References 17 publications

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“…On the other hand, the monetarists strongly believe that monetary policy has greater impact on economic activity, arguing that unanticipated change in the stock of money affects output and growth, that is, the stock of money must increase unexpectedly for the central bank to promote economic growth (Adeolu, Sunday, & Abike, 2012). A good number of empirical studies support the theoretical position that monetary policy actions affect the real sector/output growth (Ball & Mankiw, 1994;Bernanke, Gertler, & Gilchrist, 1996;Han & Hur, 2019;Ioannidis & kontonikas, 2007;Laopodis, 2013;Tule, Onipede, & Ebuh, 2020).…”

Section: Introductionmentioning

confidence: 93%

“…study ofTule et al (2020) used structural vector auto-regressive (SVAR) model to examine the monetary and fiscal policy mix on Nigerian economy using monthly data from 2003 to 2017. Empirical findings show that expansionary monetary policy tools have contemporaneous positive effects on the economy, which is in contrast to expansionary fiscal policy that does not automatically translate to growth.Empirically, the study conducted byHan and Hur (2019) used a time-varying coefficient VAR approach to examine the macroeconomic effects of monetary policy in Korea.…”

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confidence: 99%

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Pass‐Through effect of monetary policy tools on economic growth in Nigeria

Sule

2021

Journal of Public Affairs

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This study seeks to examine the pass-through effect of monetary policy tools on economic growth in Nigeria using quarterly time series data from Q12008 to Q42018.The study employed Augmented Dickey Fuller's unit root test, lag selection criteria, and impulse response function under Toda-Yamamoto approach to examine the pass-through effect of monetary policy tools on economic growth. The summary of the results is that, the dynamism in monetary policy tools through money supply remains inconsistent and the changes (either increase/decrease) in these elements could dampen down availability of credit to core private sectors thus hampering growth and development. This study therefore recommends; that monetary authority takes proactive measures to ensure sound and robust commercial banks that can facilitates substantial funds to core private sector to boost productivity of the economy. This can be achieve through close monitoring of banks and ensuring full implementations of indirect monetary policy tools.

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Section: Introductionmentioning

confidence: 93%

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confidence: 99%

Pass‐Through effect of monetary policy tools on economic growth in Nigeria

Sule

2021

Journal of Public Affairs

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“…Wosowei (2013) reveals a negative but insignificant relationship between fiscal deficit and gross domestic product. On the direction of causality, a bi-directional relationship is reported between fiscal deficit and GDP and also between government tax and unemployment in Nigeria (see inter alia, Danlami et al 2019;Tule et al 2020). Danlami et al (2019) reveal that fiscal deficit is inflationary in both the short run and the long run.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Danlami et al (2019) reveal that fiscal deficit is inflationary in both the short run and the long run. Tule et al (2020) indicate that while an expansionary monetary policy may have contemporaneous positive effects on the economy, expansionary fiscal policy does not automatically translate to growth. Fiscal expansion aggravates price level.…”

Section: Literature Reviewmentioning

confidence: 99%

Are fiscal deficits inflationary in Nigeria? New evidence from bounds testing to cointegration with structural breaks

Fasanya

Fajobi

Adetokunbo³

2021

EKON ANAL

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In this paper, we model the relationship between fiscal deficit and inflation for Nigeria using annual data from 1980 to 2016. We employ the linear ARDL approach and account for structural breaks using the Bai and Perron (2003) test that allows for multiple structural changes in regression models. The paper finds that the fiscal deficit is a major determinant of inflation along with other macroeconomic factors considered in the study. However, we observe that it may be necessary to pretest for structural breaks when modelling the relationship between the fiscal deficit and the price level, as it performs better than when structural events are not considered. The results imply that a fiscal management process that does not encourage increased revenue and reduce fiscal deficits will further worsen the level of inflation in the country.

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“…A scheme has been conducted in Nigeria by Tule et al (2020), to display the coordination between these financial policies from 2003 to 2017. According to the conclusion, these financial policies boost the growth in the economy, regardless of putting the prices in the peril of being harmed.…”

Section: Literature Reviewmentioning

confidence: 99%