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Fiscal Policy and Economic Growth in Nigeria from 1970 Till 2011

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Fiscal Policy and Economic Growth in Nigeria from 1970 Till 2011
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Home | Instructors | Journals | Contact Us | | JOURNAL OF RESEARCH IN NATIONAL DEVELOPMENT VOLUME 5 NO 2, DECEMBER, 2007FISCAL POLICY AND NIGERIAN ECONOMIC GROWTHOmitogun Olawunmi and Ayinla, Tajudeen A.
Department of Economics
Olabisi Onabanjo University, Ago-Iwoye Abstract
This paper has examined empirically the contribution of fiscal policy in the achievement of sustainable economic growth in Nigeria. Using the Solow growth model estimated with the use of Ordinary Least Square method, it was found that fiscal policy has not been effective in the area of promoting sustainable economic growth in Nigeria. Although, the finding seems invalidating the Keynesian postulation of the need for an active policy to stimulate economic activities, however, factors such as policy inconsistencies, high level of corruption, wasteful spending, poor policy implementation and lack of feedback mechanism for implemented policies evident in Nigeria which are indeed capable of hampering the effectiveness of fiscal policy have made it impossible to come up with such a conclusion. To put the Nigerian economy, therefore, along the path of sustainable growth and development, the government must put a stop to the incessant unproductive foreign borrowing, wasteful spending and uncontrolled money supply and embark upon specific policies aimed at achieving increased and sustainable productivity in all sectors of the economy.
Keywords: Fiscal Policy, Economic Stabilization, Economic Growth
Introduction
The achievement of macroeconomic goals namely full employment, stability of price level, high and sustainable economic growth, and external balance, from time immemorial, has been a policy priority of every economy whether developed or developing given the susceptibility of macroeconomic variables to fluctuations in the economy.. The realization of these goals undoubtedly is not automatic but requires policy guidance. This


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