IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025i1p2994-3009.html
   My bibliography  Save this article

Monetary and Fiscal Policies’ Effects on Commodity Price in Nigeria

Author

Listed:
  • Christian Gbarawae NWIKINA

    (Department of Economics, Faculty of Social Sciences, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt, Rivers State, Nigeria.)

  • Victor AKIDI

    (Department of Economics, Faculty of Social Sciences, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt, Rivers State, Nigeria.)

  • Lasisi ABDULLAHI

    (Department of Economics, Faculty of Social Sciences, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt, Rivers State, Nigeria.)

Abstract

Utilizing the data period 1990 to 2022, this empirical study is conducted to ascertain how monetary and fiscal policies in Nigeria impact on commodity price. The policy synthesis variable was defined as the product of broad money supply growth and government expenditure growth, while the commodity price index serves as the regressor. Monetary policy variables include the real interest rate and broad money supply growth, while fiscal policy variables include the federal government revenue growth and expenditure growth. The researchers empirically analysed yearly data from the Central Bank of Nigeria (CBN) statistical bulletin and the National Bureau of Statistics (NBS) reports employing the Autoregressive Distributive Lag (ARDL) approach. The results suggested that the policy mix variable, federal government expenditure growth, and broad money stock growth had substantial and negative effects on the commodity price index for the short-run and long-term. Real interest rate had substantial positive effect on the regressor in both the short-run and long-term. Federal government revenue growth had an insignificant negative influence in both the short-run and long-term. The study concluded that the policy mixes variable and the employed monetary and fiscal policies indicators are significant measures for commodity price moderation in Nigeria. Nevertheless, monetary policy exerted relatively stronger short-term and long-term effects on commodity price targeting than fiscal policy. The researchers recommended that the Central Bank of Nigeria (CBN) ensure a productive market-friendly interest rate and money stock growth to dampen commodity price inflation through the use of monetary policy rate, cash reserve ratio, and open market operations. Additionally, federal government should ensure that fiscal mobilization and allocations are directed towards creation of the necessary enablers to drive real economic activities, which in turn transmits to moderate commodity price level. The monetary and fiscal policy institutions should ensure proper synthesis in the management of their injection components to achieve welfare-friendly commodity prices in Nigeria.

Suggested Citation

  • Christian Gbarawae NWIKINA & Victor AKIDI & Lasisi ABDULLAHI, 2025. "Monetary and Fiscal Policies’ Effects on Commodity Price in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 2994-3009, January.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:1:p:2994-3009
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-1/2994-3009.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/monetary-and-fiscal-policies-effects-on-commodity-price-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. N. G. Mankiw, 2009. "The Macroeconomist as Scientist and Engineer," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 5.
    2. Douglas W. Diamond & Raghuram G. Rajan, 2006. "Money in a Theory of Banking," American Economic Review, American Economic Association, vol. 96(1), pages 30-53, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adnan Haider Bukhari & Safdar Ullah Khan, 2008. "A Small Open Economy DSGE Model for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 963-1008.
    2. Acosta, Juan & Cherrier, Beatrice, 2021. "The Transformation Of Economic Analysis At The Board Of Governors Of The Federal Reserve System During The 1960s," Journal of the History of Economic Thought, Cambridge University Press, vol. 43(3), pages 323-349, September.
    3. Théret, Bruno, 2011. "Du keynésianisme au libertarianisme.La place de la monnaie dans les transformations du savoir économique autorisé," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 10.
    4. Mellár, Tamás, 2010. "Válaszút előtt a makroökonómia? [Does macroeconomics face a dilemma?]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 591-611.
    5. Felicitas NOWAK-LEHMANN D. & Inma MARTÍNEZ-ZARZOSO & Dierk HERZER & Stephan KLASEN & Axel DREHER, 2010. "Foreign Aid and Its Effect on Per-Capita Income (Growth) in Recipient Countries: Pitfalls and Findings from a Time Series Perspective," EcoMod2010 259600121, EcoMod.
    6. Su, Huei-Chun & Colander, David, 2021. "The Economist As Scientist, Engineer, Or Plumber?," Journal of the History of Economic Thought, Cambridge University Press, vol. 43(2), pages 297-312, June.
    7. Tisdell, Clem, 2011. "Biodiversity conservation, loss of natural capital and interest rates," Ecological Economics, Elsevier, vol. 70(12), pages 2511-2515.
    8. Erlend Nier, 2009. "Financial Stability Frameworks and the Role of Central Banks: Lessons From the Crisis," IMF Working Papers 2009/070, International Monetary Fund.
    9. Canelli, Rosa & Fontana, Giuseppe & Realfonzo, Riccardo & Passarella, Marco Veronese, 2024. "Energy crisis, economic growth and public finance in Italy," Energy Economics, Elsevier, vol. 132(C).
    10. Carmine Gorga, 2009. "Concordian Economics: Tools to Return Relevance to Economics," Forum for Social Economics, Taylor & Francis Journals, vol. 38(1), pages 53-69, January.
    11. Peter J. Boettke & Alexander W. Salter & Daniel J. Smith, 2018. "Money as meta-rule: Buchanan’s constitutional economics as a foundation for monetary stability," Public Choice, Springer, vol. 176(3), pages 529-555, September.
    12. Zhixiong Zeng, 2013. "A theory of the non-neutrality of money with banking frictions and bank recapitalization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 729-754, March.
    13. Döpke Jörg & Fritsche Ulrich & Waldhof Gabi, 2019. "Theories, Techniques and the Formation of German Business Cycle Forecasts : Evidence from a survey of professional forecasters," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(2), pages 203-241, April.
    14. Morais, Bernardo & Peydró, José-Luis & Roldán Peña, Jessica & Ruiz Ortega, Claudia, 2019. "The International Bank Lending Channel of Monetary Policy Rates and QE: Credit Supply, Reach-for-Yield, and Real Effects," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 74(1), pages 55-90.
    15. Gabriel Jiménez & Steven Ongena & José‐Luis Peydró & Jesús Saurina, 2014. "Hazardous Times for Monetary Policy: What Do Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk‐Taking?," Econometrica, Econometric Society, vol. 82(2), pages 463-505, March.
    16. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
    17. Adnan Haider & Musleh ud Din & Ejaz Ghani, 2012. "Monetary Policy, Informality and Business Cycle Fluctuations in a Developing Economy Vulnerable to External Shocks," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 609-681.
    18. K. Lawler & T. Vlasova & A. Moscardini, 2019. "Using System Dynamics in Macroeconomics," Вестник Киевского национального университета имени Тараса Шевченко. Экономика., Socionet;Киевский национальный университет имени Тараса Шевченко, vol. 3(204), pages 34-40.
    19. Gilles Le Garrec & Vincent Touzé, 2017. "La macroéconomie à l’heure de la stagnation séculaire," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(4), pages 79-104.
    20. Richard Wagner, 2013. "What kind of state in our future? Fact and Conjecture in Vito Tanzi’s Government versus Markets," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(1), pages 93-104, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:i:1:p:2994-3009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.