Fiscal-Monetary Policy Mix and Growth Inclusion in Nigeria

Abstract

The study evaluates the efficacy of fiscal-monetary policy mix on growth inclusion in Nigeria. Using time series data, the paper employed methodology which tested for stationarity, cointegration as well as utilised error correction mechanism to reconcile the short-run behaviour of the macroeconomic variables with its long-run behavior. From the finding, fiscal-monetary policy mixes have significant positive and negative impacts on inclusive growth variables in Nigeria. Both static and dynamic analyses show that prudent fiscal policy together with healthy monetary policy raise economic welfare in a good fiscal-monetary policy mix environment for inclusive growth sustainability. Hence, we recommended appropriate channeling of the nation’s huge capital expenditure on education and health to promote inclusive growth in Nigeria. Finally, we recommended that proper targeting fiscal-monetary policy mix would enhance policy formulation, management, control and implementation and as well led to improvement in the economic well-being of the people and achieve growth inclusion.

Keywords: Fiscal-Monetary Policy Mix, Government Expenditures, Revenues, Money Supply, Inclusive Growth