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The effect of fiscal policy measures in controlling inflation in Nigeria

 Department:Banking and Finance  
 By:usericon Timmyreign101  

 Project ID: 8253
 Rating:  (3.3) votes: 6
   Price:₦3000
Abstract
This study examined the effectiveness of fiscal policy measures in controlling inflation in Nigeria. Secondary data from 1990 to 2021 were used, and data was analysed for auto-regressive distributed lag (ARDL). Augmented Dickey-Fuller unit root tests were employed to assess the level of integration of the variables under study, which included government expenditure, tax, external debt, and inflation. The research found that certain fiscal variables namely total revenue, government expenditure, and money supply, exhibited stationarity at the levels, while the consumer price index and external debt were non-stationary. The transformation of non-stationary variables into I(1) order allowed for the application of auto-regressive distributed lag (ARDL) techniques to explore the existence of a long-run relationship between fiscal policy and inflation, which was confirmed. The empirical findings revealed that fiscal policy had a potential role in reducing inflation in Nigeria, though the individual variables did not consistently exhibit statistically significant effects. Money supply was identified as a significant driver of inflation. The results also suggested that fiscal policy coordination and monitoring of money supply are pivotal for effective inflation control. The study underscores the importance of ongoing research and analysis in adapting fiscal policies in response to evolving economic conditions. These findings offer insights for policymakers seeking to enhance fiscal policy’s effectiveness in managing inflation in Nigeria. Keywords Fiscal, Inflation, Expenditure, Tax, Debt, Revenue ...
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