GOVERNMENT EXPENDITURE SHOCKS AND MACROECONOMIC PERFORMANCE IN NIGERIA: A DSGE APPROACH

JOLAADE, AYOBAMI AMINAT and covenant university, Dissertation (2018) GOVERNMENT EXPENDITURE SHOCKS AND MACROECONOMIC PERFORMANCE IN NIGERIA: A DSGE APPROACH. Masters thesis, COVENANT UNIVERSITY, OTA.

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Abstract

Fiscal policy, as history has shown, has become a major bail-out tool and run-to option whenever the economy is experiencing severe crises. Government expenditure is increased during times of recessions while it is lowered during an economic upturn. Due to the scarceness of economic resources, especially in a developing country as Nigeria, it is essential to empirically investigate the macroeconomic effects of government expenditure shocks to the economy, which is the objective of this study. This study builds up a dynamic macroeconomic model that includes several features that are peculiar to the Nigerian economy such as the large presence of Hand-to-Mouth (HTM) Households, sticky prices and wages, an indebted government and a disaggregated government expenditure. This model is considered under two different financing options and different results are obtained in both scenarios. The findings of this study reveal that government investment is a more effective but dwindling component of government expenditure than its consumption counterpart. This paper recommends that the Nigerian government should make great efforts to increase its investment expenditure and should also employ a mix of the different financing options in order to reap maximum returns in the economy.

Item Type:	Thesis (Masters)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User:	Mrs Hannah Akinwumi
Date Deposited:	29 Jan 2020 09:02
Last Modified:	29 Jan 2020 09:02
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/13070

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