Impact Of Monetary And Fiscal Policy In Controlling Unemployment In Nigeria

ABSTRACT

The study evaluated the impact of monetary and fiscal policy on unemployment using time series from 1992 to 2016. Monetary policy rate, money supply and government expenditure were the monetary and fiscal policies variables included in the model. The data was analyzed with the aid of regression analysis. The results showed that government expenditures and money supply were significant while monetary policy was not significant. Hence, it was recommended that the government of Nigeria need to make deliberate efforts to expand its expenditure by increasing its financial grants to unemployed youths in the country for productive ventures.

TABLE OF CONTENTS

Title Page ﾿ i

Declaration ﾿ ii

Certification ﾿ iii

Dedication ﾿ iv

Acknowledgement ﾿ v

Table of Contents ﾿ vi

Lists of Tables ﾿ vii

Abstract ﾿ viii

CHAPTER ONE

1.0 ﾿ Introduction ﾿ 1

1.1 ﾿ Background of the Study ﾿ 1

1.2 ﾿ Statement of the Problem ﾿ 2

1.3 ﾿ Objectives of the Study ﾿ 4

1.4 ﾿ Research Questions ﾿ 4

1.5 ﾿ Research Hypotheses ﾿ 4

1.6 ﾿ Significance of the study ﾿ 5

1.7 ﾿ Scope of the Study ﾿ 5

1.8 ﾿ Limitation of the Study ﾿ 6

1.9 ﾿ Definition of Terms ﾿ 6

CHAPTER TWO

2.0 ﾿ Review of Related Literature ﾿ 7

2.1 ﾿ Conceptual Framework ﾿ 7

2.1.1 ﾿ Concept of Fiscal Policy ﾿ 7

2.1.2 ﾿ The Difference between Fiscal and Monetary Policy ﾿ 9

2.1.3 ﾿ The Role of Fiscal and Monetary Policy in the Stabilization of the Economic Cycle11

2.1.4 ﾿ The Relation between Fiscal and Monetary Policy ﾿ 13

2.1.5 ﾿ Monetary Policy ﾿ 15

2.1.6 ﾿ Objectives of Monetary Policy ﾿ 16

2.1.7 ﾿ The Instruments of Monetary Policy ﾿ 17

2.1.8 ﾿ Challenges of Monetary Policy  ﾿ 18

2.1.9 ﾿ Effectiveness and Growing Importance of Monetary Policy ﾿ 18

2.1.10 ﾿ Types of Fiscal Policy ﾿ 20

2.1.11 ﾿ Instruments of Fiscal Policy  ﾿ 21

2.1.12 ﾿ Fiscal and Monetary Policy and Unemployment in Nigeria ﾿ 22

2.1.13 ﾿ Fiscal and Monetary Policies in Nigeria ﾿ 23

2.2 ﾿ Theoretical Framework ﾿ 25

2.2.1 ﾿ Keynesian Theory of Monetary Policy ﾿ 25

2.2.2 ﾿ The Macroeconomic Theory of Fiscal Policy ﾿ 25

2.3 ﾿ Empirical Review ﾿ 27

CHAPTER THREE

3.0 ﾿ Research Methodology ﾿ 32

3.1 ﾿ Research Design ﾿ 32

3.2 ﾿ Area of the Study ﾿ 32

3.3 ﾿ Sources of Data ﾿ 32

3.4 ﾿ Population of the Study ﾿ 32

3.5 ﾿ Model Specification ﾿ 32

3.5.1 ﾿ Description of Variables ﾿ 34

3.6 ﾿ Analytical Techniques ﾿ 34

CHAPTER FOUR

4.0 Presentation of Data, Analysis and Discussion ﾿ 36

4.1 Presentation of Data ﾿ 37

4.2 Descriptive Analysis ﾿ 37

4.3.1 Hypothesis testing ﾿ 38

4.3.2 ﾿ Discussion of Findings ﾿ 39

CHAPTER FIVE

Summary of Findings, Conclusion and Recommendations ﾿ 40

5.1 Summary of Findings ﾿ 40

5.2 Conclusion ﾿ 40

5.3 Recommendations ﾿ 40

References ﾿ 43

Appendix ﾿ 48