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Relative Effectiveness of Monetary and Fiscal Policy Measures and The Performance of The Industrial Sector in Nigeria

Bosco Itoro Ekpenyong, PhD Adeyemi John Olanrewaju

Abstract

This study examined the relative effectiveness of monetary and fiscal policy measures and the performance of the industrial sector in Nigeria. Industrial Output were regressed on monetary and fiscal policies measures. Following the stationarity and bounds cointegration tests results, the Autoregressive Distributed Lag method of analysis was applied. the results revealed that in the long and short runs, all the employed policies’ instruments positively and insignificantly impacted on Industrial Output except recurrent spending which was negative but significant only in the short-run, capital spending had only short-run significance while banks’ loans and advances impacted negatively in the short-run. Therefore, the researcher recommended among others that government should increase expenditures on productive Industrial activities, ensure increase in deposit money banks’ credits for Industrial investment and enforce special low interest rate to stimulate investments in the sector.

References

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