Fiscal Policy Shocks and Private Consumption in Nigeria: Blanchard-Perotti (2002) Approach

This paper examines the effects of fiscal policy shocks on private consumption in Nigeria. Albeit, there is a considerable number of works examining the effects of fiscal policy shocks on private consumption globally but in Nigeria, no study has used the structural VAR approach by Blanchard and Perotti (2002) as used in this paper. This approach relies on institutional information about the tax and transfer systems and the timing of tax collection to identify the automatic response of taxes and spending to private consumption as well as to infer fiscal shocks. The key result of this paper is that positive government spending shocks in Nigeria have an instantaneous negative effect on private consumption. The effect becomes significant in the period following the shock. Also, positive tax shocks have a negative effect on private consumption in the period of a shock and the effect becomes statistically insignificant afterwards. On this premises, one-off changes in government spending and taxes in Nigeria are long-lived and short-lived respectively. Thus, the government expenditure changes can be used to support private consumption in the long-run while that of taxes can only be used to support private consumption for a short period

Monetary Policy, Exchange Rate and Inflation Rate in Nigeria A Co-integration and Multi-Variate Vector Error Correction Model Approach

Evidences from empirical literature on the nexus among monetary policy, exchange rate and inflation rate have been mixed. Thus this paper attempts to re-examine this issue in Nigeria for the period spanning 1986 to 2010.In contrast to previous studies, this paper employed a Co-integration and Multi-Variate Vector Error Correction Model approach to examine both the long run and the short run nexus among monetary policy, exchange rate and inflation rate. Based on this approach, the paper found that there exist at least a co-integrating vector among the variables and the VECM estimate showed that a uni-directional causation exist from exchange rate and inflation rate to short term interest rate (measure of monetary policy) while a bi-directional causality exist form inflation rate to exchange rate. No evidence of causality was observed in the from short term interest to exchange rate and from interest rate to inflation rate. The theoretical transmission nexus deduced from the VECM estimate further revealed that changes in macroeconomic variables such as exchange rate and inflation rate granger caused a change in monetary policy stance and not otherwise. Based on these findings, this study recommends appropriate control and management of both the exchange rate and inflation rate. Keywords: monetary policy, exchange rate, inflation rate and VECM

Fiscal Policy and Term Structure of Interest Rate in Nigeria

The study examines the effects of fiscal policy on term structure of interest rate in Nigeriabetween 1981 and 2014. The paper built on the fact that continuous increase in fiscal deficit in Nigeria has not translated into equal change in term structure of interest rate as proposed by the economic theory. Using secondary annual time series data which are obtained from Central Bank statistical bulletin, 2014, the paper employed appropriate econometric techniques such unit-root test, Johansen Co-integration technique, Error Correction Mechanism and Fully Modified Ordinary Least Squares. The paper shows that fiscal deficit has a positive and significant effect on term structure of interest rate in Nigeria and concludes that consumers are not forward-looking in Nigeria as proposed by Ricardian Equivalence Hypothesis theory. Consumers in Nigeria increase their consumptions has government employed expansionary fiscal policy which may reduce the savings and investment. Consequently, reduces growth. Thus, the implication is that fiscal deficit could responsible for the uncertainties and inconsistencies in the term structure of interest rates in Nigeria

Effect of Foreign Direct Investment and Stock Market Development on Economic Growth in Nigeria (1980-2009)

This paper investigates the impact of Foreign Direct Investment (FDI) and stock market development on growth in Nigeria, for the period 1980-2009. The paper is imperative for policy makers to determine the trend of foreign direct investment and stock market development as well as the exert relationship that exists among foreign direct investment, stock market development and economic growth in Nigeria. The paper employs econometric techniques such as Unit Root test, Cointegration and Error Correction Mechanism. The results show that both foreign direct investment, its lagged and lagged stock market development have small, and a statistically significant effect on economic growth. The results seem to support the argument that extractive FDI and stock market development were growth enhancing. But the trends results show that both FDI and stock market development have cyclical movement. Finally, the results show that lagged exchange rate has positive effect on growth. These findings suggest that exchange rate appreciation enhance growth in Nigeria and there is need for more investment in these markets. Keywords: FDI; Stock Market Development; Economic Growth; Error Correction Mechanism; Cointegration and Unit Root Tes

Efficient Market Hypothesis and Nigerian Stock Market

The paper examined the weak-form efficient market hypothesis in the Nigerian stock market, using a sample data spanning the period 1986 and 2010. The study adopted a serial auto-correlation and regression method of analysis. The variables used in the study were tested for stationarity using the Augmented Dickey Fuller and Philip Perron test. The result showed that the variables are stationary at first differencing. The result of the serial auto-correlation and regression analysis both revealed that the Nigeria stock market is informational inefficient, that is stock price does not exhibit random walk. The study recommended that to enhance informational efficiency of the Nigerian stock exchange especially in this era where the lost of the global financial crisis have dominated the minds of investors, there is the need to ensure strong and adequate supervision by the regulatory authorities and also the need for a greater development of the Nigeria stock market through appropriate policies which would enhance the informational efficiency of the market. Keywords: Weak-form, Efficient Market Hypothesis, Stock Price, Serial Auto-correlation, Regression method

Effect of Foreign Direct Investment and Stock Market Development on Economic Growth in Nigeria (1980-2009)

This paper investigates the impact of Foreign Direct Investment (FDI) and stock market development on growth in Nigeria, for the period 1980-2009. The paper is imperative for policy makers to determine the trend of foreign direct investment and stock market development as well as the exert relationship that exists among foreign direct investment, stock market development and economic growth in Nigeria. The paper employs econometric techniques such as Unit Root test, Cointegration and Error Correction Mechanism. The results show that both foreign direct investment, its lagged and lagged stock market development have small, and a statistically significant effect on economic growth. The results seem to support the argument that extractive FDI and stock market development were growth enhancing. But the trends results show that both FDI and stock market development have cyclical movement. Finally, the results show that lagged exchange rate has positive effect on growth. These findings suggest that exchange rate appreciation enhance growth in Nigeria and there is need for more investment in these markets. Keywords: FDI; Stock Market Development; Economic Growth; Error Correction Mechanism; Cointegration and Unit Root Tes

Policy Mix, Convergence and Growth in ECOWAS Countries

This paper is just a sample template for the prospective authors of IISTE Over the decades, the concepts of This study attempts to examine the convergence of macro-economic policy variables among Economic Community of West African Countries (ECOWAS); examines the nature of convergence of macroeconomic policy variables among ECOWAS countries and analyze  the impact of convergence in policy mix on growth in ECOWAS countries. This was in view of examining policy mix, convergence and growth in ECOWAS countries. The study deploys the endogenous growth framework of Solow-Swan (1956) as modified by Ramsey using the Cobb Douglas production function for both the convergence equation and growth equation.  The study employed Panel Ordinary Least Square method on panel annual time-series data and analyzed with fixed-effect since a common attribute is expected from the selected countries. Panel unit root data tests were conducted in order to determine whether the series has a problem of unit-root using Dickey-Fuller. The finding of the study showed that all the selected countries diverge in their fiscal variables while they converge in monetary policy. Hence the study recommended that further studies can also conduct their research on regional basis in order to account for appropriate possibility for economic integration within the region among African countries. Key Words: Policy Mix, Convergence, Economic Growth, ECOWAS, Regional Integration

Analysis of Convergence of Fiscal Variables in Sub-Saharan African Countries (1981-2007): A Stochastic Technique

The study examined the analysis of convergence of fiscal variables among Sub-Saharan Africa (SSA) countries for the period 1981-2007. Secondary time-series data were used for the study and analysed using econometric techniques. The results showed that there were convergence in Burkina Faso, Cameroon, Nigeria, Rwanda, Sierra Leone and Uganda while there were divergence in Burundi, Kenya, Mauritius and South Africa. The study concluded that only Burkina Faso, Cameroon, Nigeria, Rwanda, Sierra Leone and Uganda could form Economic and Monetary Union (EMU) as a result of their convergence of Fiscal Variables