Fiscal Deficit in an Oil Dependent Revenue Country and Selected Macroeconomic Variables: A Time Series Analysis from Nigeria (1981-2015) (original) (raw)
In this paper, we determined the effect of fiscal deficit on selected macroeconomic variables in Nigeria by specifically evaluating the effect of fiscal deficit on gross domestic product, money supply and inflation. To achieve these objectives, we employed various econometric techniques such as unit root test, Johansen co-integration, granger causality test in which variations in gross domestic product, money supply and inflation were regressed on fiscal deficit and exchange rate using time series data from 1981 to 2015. Secondary data casing the time frame were collected from Central Bank of Nigeria statistical bulletin. The result of the analysis revealed that fiscal deficit has no significant effect on gross domestic product, money supply and inflation in Nigeria. The finding also shows that there is a positive insignificant relationship between fiscal deficit and gross domestic product. This is in line with the Keynesian postulation of the existence of positive relationship betw...
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