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Fiscal Deficit and Sectoral Output in Nigeria
Current Issue
Volume 5, 2017
Issue 6 (December)
Pages: 41-46   |   Vol. 5, No. 6, December 2017   |   Follow on         
Paper in PDF Downloads: 51   Since Dec. 20, 2017 Views: 1089   Since Dec. 20, 2017
Authors
[1]
Fabiyi Raifu Olatunde, Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria.
[2]
Dada James Temitope, Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria.
Abstract
This study examines the effect of fiscal deficit on sectoral output in Nigeria from 1981 to 2015. Five sectors namely; agricultural sector, industrial sector, building and construction sector, wholesale and retail trade sector and service sector were selected for the study. Autoregressive distributed lag is used as the estimating technique. The result shows that fiscal deficit has negative effect on agricultural, building and construction, industrial and wholesale and trade sector in the short run, while in the long run, fiscal deficit has negative effect on the following sectors: agricultural, building and construction, service and wholesale and trade. For industrial sector, fiscal deficit has positive effect in the long run. Furthermore, the result shows that interest rate has negative effect on sectoral output both in the short and long run, while inflation rate has a positive and significant effect on sectoral output in both periods. The study concludes that fiscal policy should be used with caution in order to stimulate growth.
Keywords
Fiscal Deficit, Sectoral Output, Agricultural Sector, Industrial Sector, Building and Construction Sector, Wholesale and Retail Trade Sector, Service Sector
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