International Journal of Multidisciplinary Research and Development

International Journal of Multidisciplinary Research and Development


International Journal of Multidisciplinary Research and Development
International Journal of Multidisciplinary Research and Development
Vol. 8, Issue 7 (2021)

Macroeconomic policies and misery index in Nigeria


Nyenke Christian Ugondah, Anaele Augustine Adindu

This study examined macroeconomic policies and misery index in Nigeria from 1981 to 2018. The macroeconomic policy variables considered in this study are government capital expenditure (GCEX), government recurrent expenditure (GREX) and government external debt (GEDT), money supply (MNSP), interest rate (INTR) and treasury bills (TRB). The study also introduced dummy variable to capture the effects of policy shift on misery index in Nigeria. Two major policy regimes was operated in Nigeria, direct and market based policies. Data was collected from central bank of Nigeria (CBN) statistical bulletin. This study adopted the ordinary least square (OLS) method of regression analysis. The study conducted the tests such as: R2, T-test, F-test, DW-tests, Philip Perron (PP) unit root test, Johansen cointergation test and error correction mechanism (ECM). From the results of the regression estimates it was revealed that: macroeconomic policy variables of government capital expenditure (GCEX), government recurrent expenditure (GREX) and government external debt (GEDT) supported the Keynesian theory. This means that increase in government capital expenditure (GCEX) and government recurrent expenditure (GREX) reduced misery index in Nigeria in the current period. It implies that rising external debt in current period worsened misery index in Nigeria. Also, money supply (MNSP), interest rate (INTR) and treasury bills (TRB) conformed to theory. This means that increase in money supply (MNSP) and treasury bills (TRB) and reduction in interest rate (INTR) could reduce misery index in Nigeria in the current period. The study recommended that: the government should sustain the recent expansionary fiscal policy actions and give more priority to capital expenditure than the recurrent expenditure component. This because it has the capacity of creating employment opportunities through building and construction works for the teeming Nigerian population. Hence, reducing the rate of unemployment and misery index in Nigeria. The Central Bank of Nigeria (CBN) should as a matter of urgency, reduce the rate of interest to a lower single digit to encourage investments, boost job creation and reduce economic misery in Nigeria. There should be gradual and steady increase in money supply. This will help to reduce interest rate, boost investment, create jobs and minimize economic misery in Nigeria.
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How to cite this article:
Nyenke Christian Ugondah, Anaele Augustine Adindu. Macroeconomic policies and misery index in Nigeria. International Journal of Multidisciplinary Research and Development, Volume 8, Issue 7, 2021, Pages 24-33
International Journal of Multidisciplinary Research and Development International Journal of Multidisciplinary Research and Development