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Financial Development, Money, Public Expenditure and National Income in Nigeria

Author

Listed:
  • A Enisan Akinlo

    (Department of Economics, Obafemi Awolwo University, Ile-Ife, Nigeria.)

  • O Olufisayo Akinlo

    (Department of Management and Accounting, Obafemi Awolwo University, Ile-Ife, Nigeria.)

Abstract

This paper examines the effects of financial development, money and public spending on national income in Nigeria. The results of the study, obtained using the Vector Error Correction model, show weak evidence for supply-leading view of financial development. In addition, the results provide some support for the McKinnon-Shaw repressionist proposition. Finally, there is no clear evidence to support monetary and fiscal policy effectiveness in the country. Based on these findings, the paper suggests that efforts should be geared towards the development of the financial sector, in particular, further deregulation of the sector. However, financial deregulation should be done in such a manner that the rate of interest is not allowed to be too high to discourage borrowing or too low to discourage saving and engender inefficient and unproductive investment.

Suggested Citation

  • A Enisan Akinlo & O Olufisayo Akinlo, 2007. "Financial Development, Money, Public Expenditure and National Income in Nigeria," Journal of Social and Economic Development, Institute for Social and Economic Change, Bangalore, vol. 9(1), pages 1-24, January-J.
    • Handle: RePEc:sch:journl:v:9:y:2007:i:1:p:1-24
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    File URL: http://www.isec.ac.in/JSED_v9_i1_1-24.pdf
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    Cited by:

    1. Tari Moses Karimo & Oliver Ejike Ogbonna, 2017. "Financial Deepening and Economic Growth Nexus in Nigeria: Supply-Leading or Demand-Following?," Economies, MDPI, vol. 5(1), pages 1-18, January.
    2. Enisan Akinlo, Anthony, 2021. "Dynamic Linkages Between Government-Interventionists’ Policies, Growth, Inequality And Poverty In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(2), pages 45-64, June.
    3. Anthony E. Akinlo, 2022. "How Does Corruption Affect Currency Substitution? Evidence from Nigeria," Journal of Development Policy and Practice, , vol. 7(2), pages 221-242, July.
    4. Damisah, Osikwemhe & Ekor, Maxwell, 2019. "Re-appraising the effect of the banking sector on the Nigerian economy," MPRA Paper 107841, University Library of Munich, Germany.
    5. Akinlo, Anthony Enisan, 2024. "Oil Price Shocks and Income Inequality in Nigeria: Evidence from Nonlinear ARDL Approach," African Journal of Economic Review, African Journal of Economic Review, vol. 12(1), March.

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