ABSTRACT

The study appraised the impact of fiscal policy on the Nigerian economy from 1981-2017 the main objectives of the study is to evaluate the impact of tools of fiscal policy on the GNP of the economy. The study employed the ADF test, co-integration, error correction model (ecm) and ordinary least square (ols) the study revealed that recurrent expenditure and tax revenue exerts positive relationship with gross domestic product (GNP). While government capital expenditure, indicated a negative relationship between GNP. Though capital and recurrent expenditure showed significant impact on gross domestic project, tax revenue showed negative impact and insignificantly. The ADF test showed the presence of stationarity at first and second differences, the co-integration revealed to co-integrating equation, showing evidence of long-run relationship among the variables. The error correction result indicated that the speed of adjustment was 41.1 % the study however recommended that government fiscal policy should refocus and redirect government expenditure towards production of goods and services so as to enhance GPP growth. This can be achieved by setting specific goals/ targets for each state and for the federal government. With attention on the real sector in Nigeria in order to attain the standard level of economic growth