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Can Pension Reforms Moderate Inflation Expectations and Spur Savings? Evidence from Nigeria

Eke, O. P. and Okoye, Lawrence U. and Omankhanlen, A. E (2021) Can Pension Reforms Moderate Inflation Expectations and Spur Savings? Evidence from Nigeria. WSEAS TRANSACTIONS on BUSINESS and ECONOMICS, 18,. pp. 324-337. ISSN E-ISSN: 2224-2899

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This paper tests the prior-savings theory which proposes that pension savings could moderate inflation, and spur long-tenured savings for fixed capital formation. An augmented Toda-Yamamoto longrun non-causality technique was used to analyze data from 1980 to 2018. The outcome reveals that pension saving has significant negative causal flow to gross fixed capital formation, while gross fixed capital formation does not drive inflation expectation. The outcome suggests that prior-savings theory does not hold in the Nigerian case, which may infer that government borrowing from pension fund has been for consumption expenditure. The results generalize many developing economies with similar financial structure. The paper recommends that borrowed pension savings be invested in infrastructures in line with prior-saving theory. Fiscal policy reforms that broaden and deepen the nexus are recommended.

Item Type: Article
Uncontrolled Keywords: Pensions system, Inflation, Prior savings theory, Fixed Capital Formation
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 29 Jun 2021 15:59
Last Modified: 29 Jun 2021 15:59

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