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Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience
International Journal of Finance and Banking Research
Volume 2, Issue 3, June 2016, Pages: 63-71
Received: Mar. 15, 2016; Accepted: Mar. 30, 2016; Published: May 31, 2016
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Monogbe Tunde Gabriel, Faculty of Management Science, Department of Finance and Banking, University of Port Harcourt, Rivers State, Nigeria
Davies Nkanbia Llewellyn, Faculty of Management Science, Department of Finance and Banking, University of Port Harcourt, Rivers State, Nigeria
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This paper is set out to investigate monetary and fiscal policy has tools for economic growth in Nigeria and to also investigate which of this tools is most appropriate in the Nigerian present state of economy using time series data spanning from 1981 to 2014. The application of the ECM and granger causality test reveals that total government expenditure (TGE) has a positive and a significant influence in promoting economic growth which canvass support for the Keynesian that increase in government expenditure is a key instrument in promoting economic growth and hence crowd in private investors in Nigeria. While on the other hand, increase in total money supply (TMSS) is negatively significant to economic growth which contradict the opinion of the monetarist. sequel to this, it is however glaring that increase in government expenditure play a lead role in stimulating economic growth in the long run In Nigeria. Based on our finding, we recommend that policy makers should ensure that the large quantum of fund flowing from the government pulse should be apportion asymmetrically to the productive sector of the economy like the manufacturing sector, agricultural sector, and SME’s (small and medium enterprises) among others so as to ensure fruitful returns from this investment which will in turn promote economic growth and encourage private investors as earlier stated by the Keynesian school.
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Monogbe Tunde Gabriel, Davies Nkanbia Llewellyn, Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience, International Journal of Finance and Banking Research. Vol. 2, No. 3, 2016, pp. 63-71. doi: 10.11648/j.ijfbr.20160203.12
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This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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