AN EMPIRICALSURVEY OFTHE IMPACT OF DEFICIT FINANCING AND CROWDING-OUT EFFECT IN NIGERIA: 1985-2010
| dc.contributor.author | Francis, A. Akawu | |
| dc.date.accessioned | 2023-12-14T08:33:27Z | |
| dc.date.available | 2023-12-14T08:33:27Z | |
| dc.date.issued | 2013-06-11 | |
| dc.description.abstract | It is widely believed that fiscal deficit is responsible for the ills that beset developing countries in the 1980s and now. These ills include high inflation, debt crisis, poor investment and growth performance. The objective of this study is to survey the impact of deficit financing and crowding-out effect in Nigeria between 1985 to 2010. The study used Vector auto regressive model (VAR) to carry out the analysis. ADF test for unit root was conducted on the data and as well Granger Causality test was carried out to establish the relationship that exists between the variables used in the study. The empirical results of the study suggest that budget deficit does not have any perceptible influence on interest rate in Nigeria which implies that expansionary fiscal action can not crowd out investment. However, the results indicates that budget deficit has strong but negative influence on exchange rate which suggest excessive budget deficit is responsible for the naira exchange rate depreciation. The coefficient of budget deficit indicates positive but weak relationship with GDP which suggests that most of the deficits over the years were not directed toward productive sectors of the economy. It is pertinent to note that the coefficient of external debt service payment show strong influence on interest rate, exchange rate, and GDP. These results seem to explain the effect of external debt overhang on the Nigerian economy Based on the empirical findings of the study, it is recommended, among others, that public sector expenditure programmes should be reviewed and prioritised to enhance efficiency and fiscal balance. | en_US |
| dc.identifier.citation | Miller, F.C. (1993). Fiscal deficits and interest rates: Comments. Australian Economic Paper, Vol. 32, No. 60, June. Mitchell, W.E. (1974). The crowding out of private expenditures by fiscal action. In W.E. Mitchell (ed). Readings in Macroeconomics, N/Yorth, McGrawHill,P. 156-173. Monadjemi, M.S. (1989). Fiscal deficits and interest rates: A multicountry analysis. Australian Economic Papers, Vol. 28, No. 33, December, P. 209-217. | en_US |
| dc.identifier.uri | https://keffi.nsuk.edu.ng/handle/20.500.14448/6465 | |
| dc.language.iso | en | en_US |
| dc.publisher | Department of Economics, Nasarawa State University, Keffi | en_US |
| dc.subject | Autoregressive, crowding-out, Due Process, depreciation. | en_US |
| dc.title | AN EMPIRICALSURVEY OFTHE IMPACT OF DEFICIT FINANCING AND CROWDING-OUT EFFECT IN NIGERIA: 1985-2010 | en_US |
| dc.type | Article | en_US |