Doctor of Philosophy (Ph.D.) Theses and Dissertations

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Browsing Doctor of Philosophy (Ph.D.) Theses and Dissertations by Subject "Equivalence hypothesis"

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    Effect of fiscal policy on private consumption in Nigeria (1981-2011)
    (Economics,Obafemi Awolowo University, 2014) Oseni, Isiaq Olasunkanmi
    The study examined the trend and pattern of fiscal policy variables and private consumption; established the existence of Ricardian Equivalence Hypothesis using Nigerian data; analyzed the relationship between government debt and private consumption; determined the impact of fiscal policy shocks on private consumption and investigated the effects of anticipated and unanticipated fiscal policy shocks on private consumption. This was with a view to providing information for announcement and post implementation effects of changes in fiscal policy variables on private consumption in Nigeria between 1981 and 2011. Secondary data were used for the study. Quarterly time series data on the Government Revenue, Government Expenditure, Government Debt, Interest Rates and Private Consumption from 1981:1 to 2011:4 were collected from Central Bank of Nigeria (CBN) Statistical Bulletin for various years (2008 – 2011) while data on Total Wealth, Disposable Income and Distortionary taxes were collected from World Development Indication, 2011. Data collected were analyzed using descriptive statistics and econometric techniques. The results of the trend and pattern analysis showed that there were cyclical movement between fiscal policy variables and private consumption in Nigeria for the periods of study. The results on the existence of Ricardian Equivalence Hypothesis in Nigeria indicated that only government expenditure confirmed the existence of Ricardian Equivalence Hypothesis in Nigeria (β = -0.1598, p<0.05) while other variables like distortionary taxes (β = 0.3837, p<0.05 instead of β = 0, p<0.05); disposable income (β = 0.0244, p>0.05 instead of β ≠ 0 , p<0.05); government debt (β = -0.3881, p<0.05 instead of β = -0 , p<0.05) and total wealth (β = 0.0793, p<0.05 instead β = 0 , p<0.05) showed that Ricardian Equivalence Hypothesis did not hold in Nigeria. The study also showed that government debt (β = -0.1208, p<0.05) had negative and significant effect on private consumption in Nigeria. The SVAR results revealed that government revenue shock (β = -0.97, p<0.05) and government spending shock (β = -0.36, p<0.05) had negative and significant impacts on private consumption while government debt shock (β = -0.38, p>0.05) had positive and insignificant effect on private consumption. Finally, the study also revealed that the coefficients of anticipated fiscal policy shocks (ε_t^ag= 1.6313, p<0.05; ε_t^ab= 0.1730, p<0.1 and ε_t^atr= -0.4003, p>0.05) had significant impacts on private consumption while the coefficients of unanticipated fiscal policy shocks (ε_t^ug= 9.81E-07, p<0.05; ε_t^ub= -2.33E-07, p<0.05 and ε_t^utr= -7.50E-08, p>0.05) had no significant effect on private consumption in Nigeria. The study concluded that the existence of REH in Nigeria was inconclusive. Also the announcement of government policies had immediate effect on private consumption while the implementation period had no effect on private consumption.