Browsing by Author "Olufemi, Adewale Aluko"

Now showing 1 - 2 of 2
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    Evaluating the Relative Impact of Monetary and Fiscal Policy in Nigeria using the St. Louis Equation
    (Faculty of Economic Sciences of the Danubius University, Romania, 2017) Ajayi, Michael Adebayo; Olufemi, Adewale Aluko
    The controversy existing on the efficacy of monetary and fiscal policy to influence the economy is unending. This study evaluates the relative impact of monetary and fiscal policy in Nigeria from 1986 to 2014 using a modified St. Louis equation. Employing the Ordinary Least Squares estimation method, this study reveals that growth in money supply and export have a positive and significant effect on growth in output of the economy while growth in government expenditure has a negative and insignificant effect. This study provides evidence that monetary policy has a greater growth-stimulating effect on the economy than fiscal policy. It recommends that monetary policy rather than fiscal policy should be relied upon by the Nigerian government as an economic stabilisation tool.
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    Testing the Validity of the Simultaneous Openness Hypothesis in Nigeria (1990-2015
    (African Development Bank, Addis-Ababa, 2019) Ajayi, Michael Adebayo; Olufemi, Adewale Aluko
    Since the seminal paper by Rajan and Zingales in 2003, a plethora of studies have been motivated to establish whether the simultaneous opening of trade and capital borders leads to financial sector development. We test whether the simultaneous openness hypothesis is valid for Nigeria, with a focus on the banking sector and stock market. Using annual data from 1990 to 2015 and an instrumental variable regression estimation technique, we show that the simultaneous increase of trade and financial openness limits banking sector and stock market development. Thus, there is no empirical evidence to validate the simultaneous openness hypothesis in Nigeria. It also shows that trade openness is more beneficial for banking sector and stock market development in Nigeria than financial openness.