FISCAL POLICY AND MACROECONOMIC STABILITY IN NIGERIA

This study examines the impact of fiscal policy measures on major macroeconomic goals in Nigeria from 1980 to 2013. The ordinary least square approach was adopted for the study. The study employed the cointegration and error correction technique to establish the long run relationship between variables in the models. Data for the study were obtained from secondary sources. It was found out from the study that fiscal policies increased growth but its long run effects were ineffective. Fiscal policies have not affected inflation rates; and they have encouraged large importations thereby creating deficits in its balance of payments. Finally, it was recommended that the government should direct its focus on improving capital expenditures, government’s Internally Generated Revenue should be well-coordinated by enhancing adequate domestic resource mobilization, government’s domestic and external borrowings should be geared into productive sectors of the economy to create adequate job opportunities.