Interrogating the Rationale for Monetary and Fiscal Policies Synchronization in Nigeria

Olatunji Shobande

EuroEconomica, 2019, issue 1(38), 137-151

Abstract: This study examines two empirical issues that triggered the recent negative economic growth recorded in Nigeria. First, the country’s output level in the past 16 quarters, which has been far below expectation questions the extent to which those in charge of the Nigerian economy understand the dynamics of macroeconomic policy. Second, while the fiscal authorities had focused on the use of government spending to stimulate economic growth, the monetary authorities focused their attention on inflationary targeting with a view to enhancing economic stability. Thus, conflicting objectives were observed with varying efforts at resolving the conflict. This study identified the main fiscal and monetary transmission channel that can enhance economic growth recovery of the country using the SVAR approaches. Overall result of the study shows the need for greater policy coordination and objective reconciliation among fiscal authorities.

Keywords: Monetary policy; fiscal policy; Output; Nigeria (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:dug:journl:y:2019:i:1:p:137-151

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