Testing Wagner’s Law in Nigeria in the Short and Long-run

This study tests Wagner’s law in Nigeria in both the short and long-run using the autoregressive distributed lag (ARDL) technique of estimation and controlling for structural breaks between the periods 1981-2016. Results showed that both in the short and long-run, evidence pointed to a negative but insignificant relationship between government expenditure and economic growth, with a larger negative effect in the long-run. The study controlled for oil export earnings, which was found to positively and significantly influence government spending. It was therefore recommended that the economy be diversified into more labour intensive sectors so as to increase output per worker

Financial Integration and Consumption Smoothing in Nigeria and Egypt: Do Global Uncertainties Matter?

In this study, we adopt the structural vector auto-regressive (SVAR) model to assess the degree to which global uncertainties affect the relationship between financial integration and consumption smoothing in Egypt and Nigeria using quarterly data from 2010 to 2020. The study hypothesises that global uncertainty shocks will have adverse effects on consumption smoothing in both Nigeria and Egypt. Our main results from the study show that the economic policy uncertainty shock has a more declining effect on consumption smoothing in Egypt than other global uncertainty proxies. On the other hand, global economic condition shocks have a more declining effect on consumption smoothing in Nigeria than other global uncertainty proxies. In addition, financial integration accounted for more variability in consumption smoothing in Egypt than in Nigeria; this may be due to the fact that Egypt is more financially integrated than Nigeria. We therefore make the following recommendations: Nigeria may diversify the economy by promoting growth in other sectors, such as manufacturing, to reduce the impact of external shocks on the economy and provide greater stability for households. Policymakers in Egypt can diversify export markets and reduce reliance on the US market to mitigate the impact of US policy fluctuations on Egypt’s economy

PUBLIC FAMILY SPENDING, LABOUR PRODUCTIVITY, INCOME INEQUALITY AND POVERTY GAP IN THE GROUP OF SEVEN COUNTRIES: EMPIRICAL EVIDENCE FROM PANEL DATA

Purpose. Comparable data on distribution of family income provide reference point for determining economic performance of any country, opportunity to assess effects of income inequality and poverty drivers that are either country- or region-specific. This study analysed the effectiveness of composite indices of public spending on family benefits, labour productivity, macroeconomic performance indicators and moderating factors in reducing income inequality and poverty gap in the Group of Seven (G7) countries from 1980 to 2019. Methodology. The study employed fixed effects Least Squares regression model in panel environment within the framework of empirical econometric methodologies. The composite indices comprised public spending on family benefits in cash and kind, unemployment allowance payments, tax on personal income, labour productivity, harmonised unemployment rate, consumer price index, real GDP growth rate, GDP per capita and per hour worked, fertility rate and trade. After graphical analysis of the data, order of integration was via unit root tests. Hausman test was carried out to choose between fixed and random effects models. Subsequently, parameters of the models were estimated and evaluated for significance at the 0.05 critical level. Findings. The results showed that percentage changes in income inequality and poverty gap indices differed for same percentage change in components of the composite indices. Some variable-specific percentage changes in income inequality and poverty gap were statistically significant, while others were not. However, the overall percentage changes was statistically significant. The paper concluded that while some specific effectiveness of the explanatory variables in reducing income inequality and poverty gap was not significant, their joint effectiveness significantly reduced poverty. Therefore, it is pertinent that family-oriented fiscal policy thrusts should be strengthened and sustained so as to continually reduce income inequality and, ultimately, narrow poverty gap in the countries. Limitations. The study considered the G7 countries for a period of 40 years. The limitations were that the variables considered to influence income inequality and poverty gap in the countries were both exhaustive. Also, the results were conditioned to the method used, and different methods can alternatively be used by other researchers and the results compared with this. Originality. The study is original research paper. It has neither been published in any other peer-reviewed journal not under consideration for publication by any other journal