Are fiscal deficits inflationary in Nigeria? New evidence from bounds testing to cointegration with structural breaks

Q3 Economics, Econometrics and Finance

Economic Annals Pub Date : 2021-01-01 DOI:10.2298/EKA2128123F

Ismail Fasanya, A. Fajobi, A. Adetokunbo

引用次数: 4

Abstract

In this paper, we model the relationship between fiscal deficit and inflation for Nigeria using annual data from 1980 to 2016. We employ the linear ARDL approach and account for structural breaks using the Bai and Perron (2003) test that allows for multiple structural changes in regression models. The paper finds that the fiscal deficit is a major determinant of inflation along with other macroeconomic factors considered in the study. However, we observe that it may be necessary to pretest for structural breaks when modelling the relationship between the fiscal deficit and the price level, as it performs better than when structural events are not considered. The results imply that a fiscal management process that does not encourage increased revenue and reduce fiscal deficits will further worsen the level of inflation in the country.

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尼日利亚的财政赤字是通货膨胀吗?从边界检验到结构断裂协整的新证据

在本文中，我们使用1980年至2016年的年度数据对尼日利亚的财政赤字与通货膨胀之间的关系进行了建模。我们采用线性ARDL方法，并使用Bai和Perron(2003)测试来解释结构断裂，该测试允许回归模型中的多个结构变化。本文发现，财政赤字与研究中考虑的其他宏观经济因素一起是通货膨胀的主要决定因素。然而，我们观察到，在对财政赤字和价格水平之间的关系进行建模时，可能有必要对结构性断裂进行预测试，因为它比不考虑结构性事件时表现得更好。结果表明，不鼓励增加收入和减少财政赤字的财政管理过程将进一步恶化该国的通货膨胀水平。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Economic Annals Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

0.90

自引率

0.00%

发文量

审稿时长

18 weeks

期刊介绍： Economic Annals is an academic journal that has been published on a quarterly basis since 1955, initially under its Serbian name of Ekonomski anali (EconLit). Since 2006 it has been published exclusively in English. It is published by the Faculty of Economics, University of Belgrade, Serbia. The journal publishes research in all areas of economics. The Editorial Board welcomes contributions that explore economic issues in a comparative perspective with a focus on transition and emerging economies in Europe and around the world. The journal encourages the submission of original unpublished works, not under consideration by other journals or publications. All submitted papers undergo a double blind refereeing process. Authors are expected to follow standard publication procedures [Instructions to Authors], to recognise the values of the international academic community and to respect the journal’s Policy.