EFFECTS OF FISCAL AND MONETARY POLICIES ON ECONOMIC GROWTH (1990-2017)
CHAPTER ONE
Introduction
1.1 Background to the Study
Monetary and Fiscal policies are the two major macroeconomic policies obtainable anywhere in the globe to achieve economic growth and sustainable development. Nigeria is not an exception of the countries whose major macroeconomic policies are monetary and Fiscal policy. One of the major objectives of monetary and fiscal policies in any economy is the achievement and maintenance of economic growth. The achievement of this is paramount not excluding achievement of other macroeconomic variables like; employment generation (full employment), price stability, attainment of economic development, equity in the system (income redistribution), achievement of balance of payment (BOP), exchange rate stability and increment in investment (Tchokote and Philemon, 2016).
Fiscal policy is the means by which a government adjusts its level of spending in order to monitor and influence a nation’s economy. It is used along with the monetary policy which the central bank uses to influence money supply in a nation. These two policies are used to achieve macroeconomic goals in a nation. These goals include price stability, full employment, reduction of poverty levels, high and sustainable economic growth, favourable balance of payment, and reduction in a nation’s debt (Agu, Idike, Okwor and Ugwunta, 2014).
According to Ogar, Nkamare and Emori (2014) fiscal policy is a built-in stabilizer in the sense that taxes and government expenditure can be varied at any time the government deems it necessary, so as to suit the economic climate of the country since fiscal policy is goal oriented, it is usually geared towards achieving price stability, full employment, economic growth, income redistribution, fixed and stable exchange rate, favorable balance of payment and aid to friendly countries. On the whole, fiscal policy is an instrument for drawing resources from the private sector of the economy for public sector used.
Monetary policy is one of the macroeconomic instruments with which nations use to manage their economies. Monetary policy is seen as an important aspect of the macroeconomics which deals with the use of monetary instruments designed to regulate the value, supply and cost of money in an economy, in line with the expected level of economic activity (Ubi, Lionel and Eyo, 2012). It covers the gamut of measures or combination of packages intended to influence or regulate the volume, prices as well as direction of money in the economy per unit of time. Specifically, it permeates all the debonair efforts by the monetary authorities to control the money supply and credits conditions for the purpose of achieving diverse macroeconomic objectives. In Nigeria, the responsibility for monetary policy formulation rests with the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance (FMF).
The monetary environment in Nigeria has been very unstable in the recent past, with the economy being vulnerable to shocks from volatile commodity prices. If the economy slows and employment declines, policy makers will be inclined to soften monetary policy to stimulate aggregate demand. When growth in aggregate demand is boosted above growth in the economy’s potential to produce, slack in the economy will be absorbed and employment will return to a more sustainable path. In contrast, if the economy is showing signs of overheating and inflation pressures are building, the Central Bank will be inclined to counter these pressures by tightening the economy through monetary policy to bring growth in aggregate demand below that of the economy’s potential to produce for as long as necessary to defuse the inflationary pressures and put the economy on a path to sustainable expansion (Anowor and Okorie, 2016).
While these policy choices seem reasonably straightforward, fiscal and monetary policies makers routinely face certain notable uncertainties because the actual position of the economy and growth in aggregate demand at any point in time is only partially known as key information on variables only come with lags such that policy makers are constraint to rely on estimates of these economic variables when assessing the choice of appropriate policy and therefore could act on the basis of misleading information.
Hence, this study seeks to examine fiscal-monetary policy interaction and growth dynamics in Nigeria.
1.2 Statement of the Problem
One of the major objectives of fiscal and monetary policies in Nigeria is to achieve economic growth. Despite the adoption of fiscal and monetary policies, sustainable economic growth and development associated with other macroeconomic trends of unemployment, inflation, system inequality, deficit Balance of Payment (BOP), low rate of investment, exchange rate instability still pose threat to Nigeria’s economic growth.
In this vein, Greenspan (2003) observed succinctly that “uncertainty is not just an important feature of the fiscal and monetary policies landscape; it is the defining characteristic of that landscape” within the Nigerian monetary environment, data “robousity”; data transmission mechanism and fiscal environment are notably found as her greatest challenge and uncertainty. This has become particularly interesting because the Nigerian external sector (balance of payment) via change in net foreign assets; government budget (net credit to government) influence monetary policies as much as the real growth of the economy and prices.
Most of the available studies on fiscal and monetary policies in Nigeria by Celina (2014), Morakinyo, David and Alao (2018), Usman and Adejare (2014), Adigwe, Echekoba, Justus and Onyeagba (2015) were not depth in investigation since they were theoretical studies whose findings were subjectively influenced by leading argument in literature. It is noted that available past studies did not give adequate attention to the subsisting relationship between fiscal policy, monetary policy and economic growth in Nigeria, as well as highlighting effective strategies for stimulating real growth in Nigeria. Hence, it was on the identification of this gap in knowledge that this study was conceived to critically examine fiscal-monetary policy interaction and growth dynamics in Nigeria.
1.3 Objectives of the Study
The major objective of this research study is to assess fiscal-monetary policy interaction and growth dynamics in Nigeria. Other specific objectives are:
- To examine the effect of fiscal policy on economic growth in Nigeria.
- To investigate the impact of monetary policy on economic growth in Nigeria.
- To evaluate the degree of causal relation between the key monetary and fiscal variables and economic growth.
1.4 Research Questions
The study intends to answer the following research questions:
- What is the effect of fiscal policy on economic growth in Nigeria?
- How does monetary policy impact on economic growth in Nigeria?
- What is the degree of causal relation between the key monetary and fiscal variables and economic growth?
1.5 Research Hypotheses
Hypothesis One
- H0: Fiscal policy has no significant effect on economic growth in Nigeria.
- H1: Fiscal policy has a significant effect on economic growth in Nigeria.
Hypothesis Two
- H0: Monetary policy does not have a significant impact on economic growth in Nigeria.
- H1: Monetary policy has a significant impact on economic growth in Nigeria.
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
The review of relevant literature is the main topic of this chapter. A literature review covers theoretical and methodological contributions to a certain issue in addition to the state of knowledge at the time of writing. It provides information about the state of the art in relation to the subject you are writing about. It examines the body of work on the chosen subject. The literature evaluation in this study comprises the …
Procedure for Downloading the PDF (Docx) Material
Effects of Fiscal and Monetary Policies on Economic Growth (1990-2017) can be downloaded by requesting the full set of materials at the project or seminar cost. The document will be sent via Microsoft Word (MS-Word) format via WhatsApp (e-mail) following payment confirmation.
| Seminar Material Cost ₦3,000 | Project Material Cost ₦5,000 |
Request Complete Material
 | Click here to request the Complete Material via WhatsApp including;
|
Disclaimer for Complete Material Utilization
The displayed research work titled "Effects of Fiscal and Monetary Policies on Economic Growth (1990-2017)" is stated as a research guideline towards accomplishing your assigned project / seminar research work. All the research materials on this website are ONLY for research purposes and should be used as a guideline in developing your research work. For no reason should you copy word for word as projectlist.com.ng will not be liable for any who copied the material. By ordering the complete research guideline, it signifies that you've accepted our terms of service.
Frequently Asked Questions (FAQ)
Can this topic “Auditor and Law: Concept and Implications” be used for Accountancy / Accounting Project?
Yes it can be utilized for research — This research project is designed to bring out the importance of audit to the effective working of the organization using First Bank Nigeria Plc Okpara Avenue, Enugu state. In pursuant to this, data were collected by personal interview, questionnaires and through researcher’s observation. Secondary data were collected from journals, publications and related works. Also, findings showed that all the strategies for effective working operations are applicable in the case study. It was revealed that because of the laws guiding auditors, the attitude and perception of auditors to effective working operation in my case study was adequate. Finally, based on these findings, various recommendations were made amongst which include, that for auditor’s work to be relied upon by other or for the work of …
Can the material for “Profitability Analysis of Layer Enterprise” be used as a guide for Agricultural Economics and Extension Project?
Yes it can be used — This study examined the profitability of layers production in Esan North East and Ovia North East L.G.A’s of Edo State. A purposive and convenient sampling of 64 poultry farmers was carried out in the study area in order to generate data for the analysis. Results of the study showed that the respondents were predominantly males (56%) with good educational background and relatively long farming experience in poultry production. Data collected were analyzed using Regression Models. The regression results indicated that the poultry farmers were spending too much credit on fixed capital in production from day old to spent layers with a high probability that increase in miscellaneous expenditure and layers mash will increase the profit from the production. It was observed …
Can this topic “The Contribution of Information Technology on Nigeria Banking Operations” be used for Banking and Finance (BF) Project?
Yes it can be utilized for research — As information technology is the modern trend on banking today, it’s very imperative for banks to access its impact operational performance so as to justify if the capital invested on it is justifiable or not, analyze their problem and profit possible solutions. The objective of this study is to examine how the adoption of information technology affects the operations commercial banks and the effects information technology on banks, customer relationship The main research instruments used Are questionnaire fro staffs and customers of the bank. The simple frequency percentage was adopted as the statistical measure and hypothesis testing was analyzed using chi-square. In conclusion, the study reward that information technology has tremendously improved growth and performance of the Nigeria commercial banks. …
Can the material for “The Impact of Internal Control Measures on the Detection and Prevention of Fraud in banks” be used as a guide for Business Administration and Management (BAM) Project?
Yes it can be used — Management, not the auditor is responsible for setting up and monitoring of the internal control system. Internal control system cannot fully be regarded as effective not even when the design and implementation is properly done; this is because the effectiveness of an internal control system depends on the competency and dependability of the people using it. Bank failures and widespread losses over the past two decades, have clearly pointed out the picture of how fraud has penetrated the financial strength of banks; it has however, elevated the importance of effective internal control system within the formal financial sector worldwide. Organizations set up internal control system most at times because they are required by law to do so; but then, how …
Can the material for “Design and Implementation of an Online Football Ticketing Booking System” be used as a guide for Computer Science (CS) Project?
Yes it can be used — Football Stadium is a centerpiece for the hosting of major events especially sport events such as football. It is one thing to have a stadium, and it’s another thing to manage it. Ticket acquisition is a vital aspect of stadium management. The aim of the Study is to develop an online Football Ticketing Booking System that will help in the recording and managing of financial income and booking of seats in the stadium for each registered game or event. In achieving this aim, the following specific objectives were laid out to develop an automated system for ticket acquisition for Akwa Ibom International football stadium, facilitate easy booking and management of ticket based on available seats and develop a system that …
Can the material for “Design and Implementation of an Online Seaport Bill Generating System” be used as a guide for Computer Science (CS) Project?
Yes it can be used — An Online Seaport Bill Generating System is Software designed to handle time and billing tracking as well as invoicing customers for services and products as well as monitoring an individual water transportation bill. It can track the hours worked by employees as well as expenses associated with projects or clients. The aim of this study is to develop an Online Seaport Bill Generating System that will handle the bills raised for various customers. In achieving this aim, the following specific objectives were laid out as follows to design and implement an application software that will to provide proper customer fills and records and reduce the amount of time required to prepare a bill by developing an ease and efficient automated …
Can this topic “Effect of solid water on the quality of underground water” be used for Geography Project?
Yes it can be utilized for research — The research paper examines the Effect of Solid Water on the Quality of Underground Water. In achieving this aim, the specific objectives were set out to; know the physical, chemical and biological effect of Solid Wastes on underground water and determine the amount of wastes within the study areas, determine whether the water pollutions have dangerous effect on the people and animals in the areas of study environment, prevent all individuals, relevant organizations, researchers from drinking underground water that is very closed to dumping areas in order to avoid deadly diseases, inform the people on the hazard and result of wastes on their health from drinking underground water especially those that are very close to the dumping areas in other …
Can the material for “The Impact of Effective Communication in the Relationship Between Parents and Their Children’s Well-Being in Nigeria” be used as a guide for Education Project?
Yes it can be used — The relationship between parents and their children’s wellbeing is an exceptionally significant element in the personality formation and particularly the socialization of the child from the stage of infancy to childhood and the eventual adolescence. The study scrutinized the Impact of Effective Communication in the Relationship between Parents and their Children's well-being in Nigeria. In achieving this aim, the following specific objectives were laid out to identify the different patterns of Parent-child communication adopted by their parents and examine the factors instigating effective communication in the relationship between parents and their children's well-being in Nigeria. The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from the respondents for this project. A total of …
Can the material for “Antimicrobial Activities and Physico-Chemical Analyses of Honeys From Hypotrigona Sp., Melipona Sp. and Apis Mellifera (Bee Honey)” be used as a guide for Microbiology Project?
Yes it can be used — Honey has been used traditionally for ages to treat infectious diseases. Antimicrobial activity of honey is complex due to the involvement of multiple bioactive compounds. The physico-chemical and antimicrobial properties of honey varieties from Apis mellifera and stingless bees,Hypotrigona sp. (Okotobo − Igbo) and Melipona sp.(Ifufu − Igbo) were studied using International Honey Commission protocols and microbiological methods (agar-well diffusion and broth microdilution) respectively. A total of nine honey samples (3 from each) were used. The physico-chemical analyses of the honey varieties showed that the honeys had mean pH range of 3.73±0.08 − 4.24±0.20. Honey samples from Hypotrigona sp. had the highest mean moisture (17.50 ± 0.80 %), total dissolved solids (370.01 ± 22.51 ppm), hydromethylfurfural (16.58 ± 0.37 mg/kg), …
Can the material for “The Effect of Radio Advertising Time on Consumer Behaviour” be used as a guide for Mass Communication (MC) Project?
Yes it can be used — Radio advertisements drive consumers to remember messages differently in reference to the favorite programme, such beliefs of listeners help advertisement to stay atop of the mind and consumers unconsciously associate with it as a personally relevant information and have an enduring impact on their emotions. The study investigates the Effect of Radio Advertising Time on Consumer Behaviour using Orient FM as a case study. In achieving this aim, the following specific objectives were laid out to examine the broadcast of advertisements on radio has positive impact on urban commuters towards conceiving and sharing information and evaluate the radio advertisements motivating and capable of driving arousal among consumer behavior. The research design used in this report is descriptive design, utilizing questionnaire …