Impact of Monetary and Fiscal Policies in Combating Inflation in Nigeria (1984-2014)

Abstract

The study investigated impact of monetary and fiscal policies in combating inflation in Nigeria from 1984 to 2014. Ex- post facto research design was adopted for the study. Data used for the study were obtained from secondary source mainly from Central Bank of Nigeria statistical bulletin. Two main econometrics analysis were used for the study: ordinary least square method to study the relationship between monetary policy, fiscal policy and inflation, while Johanson Juselius Co-integration Test was used to study the long run equilibrium among the variables.

The study concluded that probability of each variable shows that they are statistically significant which means monetary and fiscal policies are both effective in tackling inflation in Nigeria. The study recommends that there should be proper co-ordination between monetary and fiscal policies as this will enhance discipline in government spending, and at the same time, will reduce inflationary pressure.