Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience

Monogbe Tunde Gabriel; Davies Nkanbia Llewellyn

doi:doi:10.11648/j.ijfbr.20160203.12

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Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience

Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn

Published in International Journal of Finance and Banking Research (Volume 2, Issue 3)

Received: 15 March 2016 Accepted: 30 March 2016 Published: 31 May 2016

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Abstract

This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.

Published in	International Journal of Finance and Banking Research (Volume 2, Issue 3)
DOI	10.11648/j.ijfbr.20160203.12
Page(s)	63-71
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

TGE, TMSS, GRANGER CAUSE, RGDP

References

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[2]	Ayadi, F.S and Ayadi, F.O (2008). “The Impact of External Debt on Economic Growth: A Comparative Study of Nigeria and South Africa”. Journal of Sustainable Development in Africa. 10 (3).
[3]	Ben, O. and Abu, N. 2010. Do fiscal Deficits Raise Interest Rates in Nigeria? A Vector Auto regression Approach. Journal of Applied Quantitative method.
[4]	Egwaikhide, F. O. (1999). Effects of Budget Deficit on Trade Balance in Nigeria: A Stimulation Exercise, African Development Review 11(2), 265-289.
[5]	Ezirim, C. B., Muohgalu, M. I., Elike, U., & Amuzie, A. E. (2010). Public expenditure growth, inflation and cointegration: evidence from Nigeria. International Journal of Business and Behavioural Sciences’ Research, 1(1), 1-14.
[6]	Fatas, A., & Mihov, I. (2001). The effects of fiscal policy on consumption and employment: theory and evidence, CEPR, Working Paper, No. 2760.
[7]	Faraji Kasidi and Makame Said, A. (2013). “Impact of External Debt on Economic Growth: A Case Study of Tanzania”. Advances in Management and Applied Economics. 3(4), 59-82.
[8]	Hsing, Y. (2013). Effects of fiscal policy and monetary policy on the stock market in Poland. Economies, 1, 19-25. http://dx.doi.org/10.3390/economies 1030019
[9]	Ikechukwu S. Nnamdi, (2015) financial market funds and economic growth nexus in Nigeria: a cointergration perspective with lessons. European journal for business and management 7(2), 2015.
[10]	Jhingan, M.L. Macro economic theory 12th edition. Vrinda publications (p) ltd, ISBN 978-8281-298-7.
[11]	Monogbe, et al (2015). Deficit finance and the Nigeria economic performance. International Journal of Advanced Academic Research \| Social Sciences and Education \| (1), 3 (December 2015).
[12]	Monogbe, (2016) intergeneration effect of external debt on the performance of the Nigeria economy. Saudi Arabian journal of business and development studies. (5), 2, January 2016.
[13]	Nwodo, D. 2000. The Long-run Effect of Budget Deficit on Economic Growth in Nigeria. Oxford University Press.
[14]	Ogunmuyiwa, M.S. (2011). “Does External Debt Promote Economic Growth?” Current Research Journal of Economic Theory, 3(1), 29-35.
[15]	Ogbulu, O.N., Torbira L.L. & Umezinwa C.L (2015). Assessment of the Impact of Fiscal Policy Operations on Stock Price.
[16]	Performance: Empirical Evidence from Nigeria. International Journal of Financial Research. 6(2), 2015.
[17]	Osuka B.O, and Achinihu J.C (2014). The Impact Of Budget Deficits On Macro-Economic Variables In The Nigerian Economy (1981 – 2012), International Journal for Innovation Education and Research www.ijier.net Vol. 2-11, 2014.
[18]	Onafowora, O. A., and Owoye, O. (2006). An Empirical Investigation of Budget and Trade Deficits: The Case of Nigeria, The Journal of Developing Areas 39(2), 153-174.
[19]	Omoka, P. C. and Oruka, L. I. 2010. Budget Deficits, Money Supply and Inflation in Nigeria. European Journal of Economics, Finance and Administrative Sciences, 19.
[20]	Sulaiman, L.A. and Azeez, B.A. (2012). “Effect of External Debt on Economic Growth of Nigeria”. Journal of Economic and Sustainable Development, 3(8).
[21]	Tallman, W. and Rosensweig (1991). Investigations U.S. Government and Trade Deficits Economic Review (Federal Reserve Bank of Atlanta) 1-11.
[22]	Yaya, K. 2010. Budget Deficit and Economic Growth: Causality Evidence and Policy Implications for WAEMU Countries. European Journal of Economic, Finance and Administration Sciences. Issue 18.

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APA Style

Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn. (2016). Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. International Journal of Finance and Banking Research, 2(3), 63-71. https://doi.org/10.11648/j.ijfbr.20160203.12

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ACS Style

Monogbe Tunde Gabriel; Davies Nkanbia Llewellyn. Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. Int. J. Finance Bank. Res. 2016, 2(3), 63-71. doi: 10.11648/j.ijfbr.20160203.12

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AMA Style

Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn. Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. Int J Finance Bank Res. 2016;2(3):63-71. doi: 10.11648/j.ijfbr.20160203.12

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@article{10.11648/j.ijfbr.20160203.12,
  author = {Monogbe Tunde Gabriel and Davies Nkanbia Llewellyn},
  title = {Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience},
  journal = {International Journal of Finance and Banking Research},
  volume = {2},
  number = {3},
  pages = {63-71},
  doi = {10.11648/j.ijfbr.20160203.12},
  url = {https://doi.org/10.11648/j.ijfbr.20160203.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160203.12},
  abstract = {This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.},
 year = {2016}
}

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TY  - JOUR
T1  - Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience
AU  - Monogbe Tunde Gabriel
AU  - Davies Nkanbia Llewellyn
Y1  - 2016/05/31
PY  - 2016
N1  - https://doi.org/10.11648/j.ijfbr.20160203.12
DO  - 10.11648/j.ijfbr.20160203.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 63
EP  - 71
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20160203.12
AB  - This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.
VL  - 2
IS  - 3
ER  -

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Author Information

Monogbe Tunde Gabriel

Faculty of Management Science, Department of Finance and Banking, University of Port Harcourt, Rivers State, Nigeria
Davies Nkanbia Llewellyn

Faculty of Management Science, Department of Finance and Banking, University of Port Harcourt, Rivers State, Nigeria

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APA Style

Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn. (2016). Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. International Journal of Finance and Banking Research, 2(3), 63-71. https://doi.org/10.11648/j.ijfbr.20160203.12

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ACS Style

Monogbe Tunde Gabriel; Davies Nkanbia Llewellyn. Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. Int. J. Finance Bank. Res. 2016, 2(3), 63-71. doi: 10.11648/j.ijfbr.20160203.12

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AMA Style

Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn. Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience. Int J Finance Bank Res. 2016;2(3):63-71. doi: 10.11648/j.ijfbr.20160203.12

Copy | Download

@article{10.11648/j.ijfbr.20160203.12,
  author = {Monogbe Tunde Gabriel and Davies Nkanbia Llewellyn},
  title = {Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience},
  journal = {International Journal of Finance and Banking Research},
  volume = {2},
  number = {3},
  pages = {63-71},
  doi = {10.11648/j.ijfbr.20160203.12},
  url = {https://doi.org/10.11648/j.ijfbr.20160203.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160203.12},
  abstract = {This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience
AU  - Monogbe Tunde Gabriel
AU  - Davies Nkanbia Llewellyn
Y1  - 2016/05/31
PY  - 2016
N1  - https://doi.org/10.11648/j.ijfbr.20160203.12
DO  - 10.11648/j.ijfbr.20160203.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 63
EP  - 71
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20160203.12
AB  - This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.
VL  - 2
IS  - 3
ER  -

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