THE IMPACT OF FISCAL POLICY ON INFLATION IN NIGERIA

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Godly Otto, Wilfred Isioma Ukpere ORCID logo

https://doi.org/10.22495/rgcv5i1c1art5

Abstract

Inflation is a major problem in Nigeria. To stabilize the economy, policy makers have often used fiscal and monetary policies to address inflation. For efficacy of policy, it is important to know the likely influence of each of these on inflation in order to properly prescribe a solution. This work attempts to see the impact of fiscal policy on inflation. This is necessary because of the current demands of the Academic Staff Union of Universities (ASUU), which is likely to increase government spending and possible inflation. Using data from the Central Bank of Nigeria spanning 32 years, the study used an ordinary least squares regression analysis, and observed that fiscal policy impacts on inflation but such impact is not significant. Therefore, government may on the basis of this study, implement the agreement it had with the Academic Staff Union of Universities without the fear of inflation.

Keywords: Inflation, Fiscal Policy, Government Revenue, Government Spending

How to cite this paper: Otto, G., Ukpere, W. (2015). The impact of fiscal policy on inflation in Nigeria. Risk governance & control: Financial markets & institutions, 5(1-1), 123-132. https://doi.org/10.22495/rgcv5i1c1art5