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The Relative Impact of Money Supply and Government Expenditure on Economic Growth in Nigeria

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  • Peter Siyan
  • Adewale Emmanuel Adegoriola

Abstract

This study investigates the relative impact of money supply and government expenditure on economic growth in Nigeria. In order to achieve the objectives, we proposed and specified models with parameters, which were estimated and used to test the hypothesis on relative impact of money supply vis-à-vis government expenditure. The Beta Coefficients techniques and Two Stage Least Square were employed to analyze the data. The empirical result showed that the government expenditure is relatively more effective compared with money supply on economic activities. Government expenditure as a fiscal policy instrument is greater, more reliable (predictable) and faster than the use of money supply as a monetary policy instrument in stabilizing the economy. Since both government expenditure and money supply are policy instruments use to stabilize the economy, government should rely more on government expenditure than money supply. However, the combination and harmonization of both money supply and government expenditure are highly recommended.

Suggested Citation

  • Peter Siyan & Adewale Emmanuel Adegoriola, 2015. "The Relative Impact of Money Supply and Government Expenditure on Economic Growth in Nigeria," Economy, Asian Online Journal Publishing Group, vol. 2(3), pages 49-57.
    • Handle: RePEc:aoj:econom:v:2:y:2015:i:3:p:49-57:id:566
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    File URL: http://asianonlinejournals.com/index.php/Economy/article/view/566/567
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    Cited by:

    1. Ubi-Abai, Itoro & Ekere, Daniel, 2018. "Fiscal Policy, Monetary Policy and Economic Growth in Sub-Saharan Africa," MPRA Paper 91950, University Library of Munich, Germany.

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