The Inflationary Effects of Budget Deficit in Nigeria
Purpose. Chronic budget deficit and rising inflation have been the major problems of government in Nigeria with their implication for significant macroeconomic variables. The government’s efforts in curbing these problems have not yielded the expected result. Thus, this study investigated the inflat...
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| Format: | Article |
| Language: | English |
| Published: |
Juraj Dobrila University of Pula
2022-01-01
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| Series: | Review of Innovation and Competitiveness |
| Subjects: | |
| Online Access: | https://hrcak.srce.hr/file/414240 |
| _version_ | 1828181955616702464 |
|---|---|
| author | Oludayo Elijah Adekunle |
| author_facet | Oludayo Elijah Adekunle |
| author_sort | Oludayo Elijah Adekunle |
| collection | DOAJ |
| description | Purpose. Chronic budget deficit and rising inflation have been the major problems of government in Nigeria with their implication for significant macroeconomic variables. The government’s efforts in curbing these problems have not yielded the expected result. Thus, this study investigated the inflationary effects of the budget deficit in Nigeria.
Methodology. Augmented-Dickey Fuller test, Bound Test and Autoregressive Distributed Lag test (ARDL) were used for analysis. Data were sourced from Central Bank of Nigerian Statistical Bulletin from 1986 to 2019.
Finding and Implication. A long-run dynamic relationship was established between the budget deficit and the inflation rate in Nigeria, Based on findings, long run movement was discovered between budget deficit and inflation in Nigeria. It was established that rising budget deficit lead to inflationary pressure in Nigeria. Thus, there is need for government to work assiduously and diligently in ensuring balance in national budget.
Originality and Limitation. This study contributed to existing study by investigating the dynamic inflationary effects of budget deficit in Nigeria and the adoption of important deficit financing variables. This study mainly focused on inflation rate without looking at the effect of budget deficit on other macroeconomic variables. Thus, future studies should focus on other macroeconomic variables like unemployment rate and balance of payments. |
| first_indexed | 2024-04-12T06:09:15Z |
| format | Article |
| id | doaj.art-4ad727a7388042149bdd2fc0e296e760 |
| institution | Directory Open Access Journal |
| issn | 1849-8795 1849-9015 |
| language | English |
| last_indexed | 2024-04-12T06:09:15Z |
| publishDate | 2022-01-01 |
| publisher | Juraj Dobrila University of Pula |
| record_format | Article |
| series | Review of Innovation and Competitiveness |
| spelling | doaj.art-4ad727a7388042149bdd2fc0e296e7602022-12-22T03:44:44ZengJuraj Dobrila University of PulaReview of Innovation and Competitiveness1849-87951849-90152022-01-018152010.32728/ric.2022.81/1407The Inflationary Effects of Budget Deficit in NigeriaOludayo Elijah Adekunle0Department of Banking and Finance, Adekunle Ajasin University Akungba-Akoko, Ondo State, NigeriaPurpose. Chronic budget deficit and rising inflation have been the major problems of government in Nigeria with their implication for significant macroeconomic variables. The government’s efforts in curbing these problems have not yielded the expected result. Thus, this study investigated the inflationary effects of the budget deficit in Nigeria. Methodology. Augmented-Dickey Fuller test, Bound Test and Autoregressive Distributed Lag test (ARDL) were used for analysis. Data were sourced from Central Bank of Nigerian Statistical Bulletin from 1986 to 2019. Finding and Implication. A long-run dynamic relationship was established between the budget deficit and the inflation rate in Nigeria, Based on findings, long run movement was discovered between budget deficit and inflation in Nigeria. It was established that rising budget deficit lead to inflationary pressure in Nigeria. Thus, there is need for government to work assiduously and diligently in ensuring balance in national budget. Originality and Limitation. This study contributed to existing study by investigating the dynamic inflationary effects of budget deficit in Nigeria and the adoption of important deficit financing variables. This study mainly focused on inflation rate without looking at the effect of budget deficit on other macroeconomic variables. Thus, future studies should focus on other macroeconomic variables like unemployment rate and balance of payments.https://hrcak.srce.hr/file/414240autoregressive distributed lagbudget deficitinflationmacroeconomic variables |
| spellingShingle | Oludayo Elijah Adekunle The Inflationary Effects of Budget Deficit in Nigeria Review of Innovation and Competitiveness autoregressive distributed lag budget deficit inflation macroeconomic variables |
| title | The Inflationary Effects of Budget Deficit in Nigeria |
| title_full | The Inflationary Effects of Budget Deficit in Nigeria |
| title_fullStr | The Inflationary Effects of Budget Deficit in Nigeria |
| title_full_unstemmed | The Inflationary Effects of Budget Deficit in Nigeria |
| title_short | The Inflationary Effects of Budget Deficit in Nigeria |
| title_sort | inflationary effects of budget deficit in nigeria |
| topic | autoregressive distributed lag budget deficit inflation macroeconomic variables |
| url | https://hrcak.srce.hr/file/414240 |
| work_keys_str_mv | AT oludayoelijahadekunle theinflationaryeffectsofbudgetdeficitinnigeria AT oludayoelijahadekunle inflationaryeffectsofbudgetdeficitinnigeria |