出版社：The International Institute for Science, Technology and Education (IISTE)
摘要：This paper investigates theinterplay of government expenditure and private sector investment on the economy of Nigeria. Annual time series data are used for the period from1981-2013. The Unit root tests show that at the 5% level of significance, all the variables were stationary at both level and first difference, thus confirming a transitory stochastic trend. The Johansen cointegration test demonstrate that three cointegrating long-run relationship exist between the GDP, Capital Expenditure, Recurrent Expenditure and Credit to the Private Sector.However, in the short-run, disequilibrium errors were detected. Consequently, the Error correction modelwas engaged to ascertain the proportion of the disequilibrium errors built up in the preceding short-run periods that are corrected in the current period. Our result gave a speed of adjustment of 66% with its expected negative sign, which shows statistical significance at the 5% level. In addition, we conducted a Granger causality test to demonstrate the direction of causality of the variables. We find bi-directional causality between CAPEX and GDP; CPS and GDP; and REPEX to CPS; while uni-directional causality exists from CAPEX to REPEX; and CPS to CAPEX. First recommendation is that monetary and fiscal authorities should make credible policies and give an in-depth attention to its capital investment strategies to ensure they are adequately implemented with feedback mechanisms. Second, an equilibrium fiscal management such that deficit financing do not interfere or create a negative multiplier effect on private sector credits. Third, the interest rate charged by banks’ on credits to the Private sector should be minimal in order to boost economic activities.
关键词：Government Expenditure; Private Sector Investment; Economic Growth; Error Correction model; Cumulative Sum of Residual Test.
