EuroEconomica, Vol 38, No 1 (2019)

Interrogating the Rationale for Monetary and Fiscal Policies Synchronization in Nigeria

Olatunji Abdul Shobande

Abstract


This study examines two empirical issues that triggered the recent negative economic growthrecorded in Nigeria. First, the country’s output level in the past 16 quarters, which has been farbelow expectation questions the extent to which those in charge of the Nigerian economyunderstand the dynamics of macroeconomic policy. Second, while the fiscal authorities hadfocused on the use of government spending to stimulate economic growth, the monetaryauthorities focused their attention on inflationary targeting with a view to enhancing economicstability. Thus, conflicting objectives were observed with varying efforts at resolving theconflict. This study identified the main fiscal and monetary transmission channel that canenhance economic growth recovery of the country using the SVAR approaches. Overall result ofthe study shows the need for greater policy coordination and objective reconciliation amongfiscal authorities.


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