External Shock And The Responsiveness Of Fiscal Measures In Nigerian Economy

Olawale Akindele, Olamide, M Fasoranti
2017 unpublished
The Nigerian economy is an open economy, one that is highly integrated within the global economy. This study was able to provide updated knowledge on the effect of external shocks on fiscal measures episodes experienced in Nigeria. This study was able to examine the responses of fiscal measures variables to various external shocks, assess the effect of external shocks on the national income output in Nigeria among others during the period considered. The Vector Autoregession (VAR) technique was
more » ... employed after the ADF unit root test was carried out on the time series data used. It was revealed that world oil price shock as one of the variables identified as external shock having a distortionary impact on the government revenue, government expenditures and to have affected the economic performance indicator (GDP) negatively. External reserve has impacted positively on government revenue, government expenditure as well as performance of the economy (GDP). This paper concluded that the Nigeria economy and her fiscal measures did not respond favorably to the shock from external factors identified in the study. Policies were recommended to diversified the economy, encourage competitive exchange rate and fiscal prudency.
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