Threshold Analysis of Fiscal Deficits with Respect to Monetary Growth: Evidence from Nigeria

Sanusi Kazeem Abimbola ()
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Sanusi Kazeem Abimbola: School of Economics, Accounting & IT, North West University

Ovidius University Annals, Economic Sciences Series, 2017, vol. XVII, issue 2, 639-643

Abstract: This paper aims at determining the threshold level of fiscal deficits with regards to monetary growth. Data for the study are obtained from Central Bank of Nigeria Statistical publication between 1986 and 2016. The empirical findings suggest that optimal level of fiscal deficits with regards to monetary growth is at the point where the fiscal deficits, as a percentage of GDP is 31. The major conclusion from the study is that continuous accumulation of deficits in the economy by the government should be avoided. This can be done by strengthen fiscal consolidaton and provision of viable institutional fiscal rules so as not reach the threshold level.

Keywords: Threshold; Deficits; Monetary Base (search for similar items in EconPapers)
JEL-codes: E51 H62 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xvii:y:2017:i:2:p:639-643

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