Nexus between Fiscal Policy and Citizen’s Misery in a Developing Country : Evidence from Nigeria

Abstract

study results showed that a minimum misery index value of 16.92% in 2007Q3 and a maximum value of 53.42% in 2016Q4 existed within the period under review. Also, an average value of 31.49% was indicated under the study period. Okonji (2019) examined the relationship between macroeconomic performance and economic wellbeing in Nigeria by using economic growth, debts, fiscal policy stance, monetary policy stance and efficiency of governance as measures of macroeconomic performance. The K-class model was used to estimate the data and the result showed that economic growth, through allocative efficiency engenders wellbeing while contractionary monetary policy inhibits wellbeing. Also, excessive borrowing undermines the wellbeing of the Nigerian citizens. Therefore, the study recommended that the monetary authority should maintain a relatively low interest rate.Ovat (2020) investigated the effect of macroeconomic policies on citizen’s misery in Nigeria by adapting the Hanke’s model. The study employed the Auto-regressive Distributive Lag (ARDL) model to analyse its data and found that real GDP (a proxy for economic growth) and fiscal policy failed to reduce the misery of Nigerians citizens. But monetary policy and trade policies significantly alleviate the misery of Nigerian citizens. The study therefore recommended that monetary authorities should intensify their efforts in influencing the misery index