Investigating the monetary and fiscal policy regimes dominance for inflation determination in Nigeria: a Bayesian TVP-VAR analysis
by Olusola Joel Oyeleke; Lukman O. Oyelami; Adeyemi A. Ogundipe
International Journal of Computational Economics and Econometrics (IJCEE), Vol. 12, No. 3, 2022

Abstract: Persistent increase in general price level has been generating policy issues between monetary and fiscal authorities in Nigeria. This study explores dominance of policy regime (monetary versus fiscal) and extends the analysis to inflation determination in Nigeria from 1981 to 2016. The study makes use of secondary data sourced from Central Bank of Nigeria (CBN) Statistical Bulletin (2016). Stationarity properties of the variables are examined using augmented Dicky-Fuller (ADF) and Philip-Perron (PP) unit root tests. Johansen co-integration test results show the presence of long run relationship among the variables. The study employs Bayesian time varying parameter vector auto regression (TVP-VAR) with stochastic volatility and draws sample with MCMC to generate impulse response functions. The results show that there is no definite policy regime dominating in the economy of Nigeria. The implication is that inflation problem could not be attributed to a particular policy regime. Therefore, for ease of adjustments, a definite policy regime should be allowed to prevail to achieve price stability in the economy of Nigeria.

Online publication date: Fri, 13-May-2022

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Computational Economics and Econometrics (IJCEE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com