TO GET THE COMPLETE JOURNAL/THESIS FOR TOPIC BELOW,
CALL: 08168759420, 08068231953
WHATSAPP: 08137701720
BUDGET DEFICIT AND ECONOMIC GROWTH NEXUS IN NIGERIA
ABSTRACT
The empirical literature on the budget deficit–growth nexus has piqued the attention of Economists, but the findings are far from unanimous. This paper investigated the relationship between Nigeria’s budget deficit and economic growth from 1981 to 2019. The Johansen Cointegration test, the Toda and Yamamoto Granger causality test were used. The paper’s estimated results revealed causal relationships between our variables of interest. The paper also revealed that the budget deficit, domestic credit, and exchange rate affect Nigeria’s economic growth. The paper concluded that the budget deficit is an expansionary fiscal policy tool that stimulates economic growth and that the budget deficit does not necessarily intensify inflationary pressures in Nigeria but rather manifests through other macroeconomic variables. As a result, the paper proposed that monetary policy be improved to function as checks and balances and supplement fiscal policy to maintain Nigeria’s economic growth.
Keywords: Budget deficit, economic growth, fiscal policy, inflation, Toda and Yamamoto