Empirical Investigation of the Effect of Export Price Fluctuations on Fiscal and Monetary Policies in Nigeria, 19812017

Abstract

This study investigated the effect of export price fluctuations on fiscal and monetary policies in Nigeria from1981 to 2017. It adopted a Parsimonious Error correction model to analyze the variables. Data were obtained from various statistical bulletin. The study found that in the long run, fiscal deficit responded positively to crude oil export price while in the short run it had a negative response to agriculture and solid mineral export prices contrary to its positive response to changes in crude oil export price. The study also found that in the short run, money supply had significant and negative response to agriculture export price. In the long run however, M2 responded positively to agriculture variation, prices of solid mineral and crude oil. The paper recommended the need for government to review its fiscal consideration.