Abstract
The empirical investigation of the macroeconomic consequences of fiscal or monetary policy changes has typically relied on the conventional vector autoregressive framework, which often has temporal aggregation concerns. This present study therefore provides new insights into the macroeconomic effects of fiscal policy in Nigeria. The empirical analysis was implemented using the mixed-frequency vector autoregression technique to overcome the temporal aggregation issue. The results demonstrate that using both fiscal policy indicators is effective in stimulating and stabilizing the Nigerian economy, although their effectiveness may vary depending on the economic conditions of the country. Specifically, the findings suggest that fiscal expansion is a more proactive measure for stimulating economic performance, whereas tax revenue is better suited for mitigating inflationary pressure in Nigeria. This study underscores important policy insights for achieving fiscal sustainability in Nigeria based on these results.
Published Version
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