INVESTIGATED THE IMPACT OF DEFICIT FINANCING ON ECONOMIC DEVELOPMENT IN NIGERIA FROM 1980-2017 USING DATA FROM CENTRAL BANK OF NIGERIA STATISTICAL BULLETIN 2018

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ABSTRACT

This study investigatedthe impact of deficit financing on economic development in Nigeria from 1980-2017 using data from Central Bank of Nigeria statistical bulletin (2018). The study adopted the Ordinary Least Square (OLS) method estimation technique to conduct quantitative analysis. The results of this study were analyzed using economic a priori criteria, statistical criteria and econometric criteria. Findings as analyzed in the empirical result of aggregate model revealed that budget deficit and gross fixed capital formation are negative and insignificant in impacting on economic development. Findings also revealed that inflation and labor force are positive and significant in impacting on economic development. The study recommends that government should mobilize funds from the surplus spending units to the deficit spending units to boast economic development in Nigeria. The study also recommends that there is need for government to set up monitoring teams that will make sure that the budget is well and carefully implemented to avoid mismanagement of funds.

TABLE OF CONTENTS

TITLE PAGE                                                                          i

DECLARATION                                                                     ii

CERTIFICATION                                                                   iii

DEDICATION                                                                        iv

ACKNOWLEDGEMENT                                                       v

ABSTRACT                                                                            vii

TABLE OF CONTENT                                                           viii

APPENDIX                                                                             x

CHAPTER ONE: INTRODUCTION

  1. Background to the Study                                               1
    1. Statement of Problem                                                    4

1.3     Objective of the Study                                                   8

  1. Research Hypotheses                                                     8

1.5     Significance of the Study                                               9

  1. Scope  of the Study                                                       10     
    1. Organization of the Study                                              11

CHAPTER TWO

  • Literature Review: Empirical or Theoretical Framework  12 

          2.1.    Theoretical Framework                                                  24

          2.1.1   Keynesian Theory                                                        24

              2.1.2. Balanced Budget Multiplier                                           28

  • Causes of Deficit Financing                                           31

2.3.    Means of Financing a Budget Deficits                           33

2.4     Net Benefits and Adverse effects associated a Policy

          of Deficit Financing (Budgeting)                                    36

CHAPTER THREE: RESEARCH METHODOLOGY

3.1   Research Design                                                              41     

3.2   Model Specification                                                         41

3.3   Estimation Techniques                                                    43

3.4     Sources of Data Collection                                            46

3.5     Limitations of the study                                                 46

CHAPTER FOUR

4.1     Analysis of Data                                                           48

4.2     Analysis of Result                                                                   48

4.2.1  Empirical Results of the Aggregate Model                     49

4.1.2  Economic Criteria                                                                   50

4.1.3  Statistical Criteria                                                                   52

4.1.4  Econometric Criteria (Second-order test)                       55

4.3     Discussion of Findings                                                  56

4.4     Policy Implication                                                          56

4.5     Test of Hypotheses                                                        57

CHAPTER FIVE: SUMMARY, CONCLUSION AND

POLICY RECOMMENDATIONS

5.1     Summary of Findings                                                    59

5.2     Conclusion                                                                    60

5.3     Policy Recommendations                                               60

REFERENCES                                                              63

APPENDIX                                                                             67

INVESTIGATED THE IMPACT OF DEFICIT FINANCING ON ECONOMIC DEVELOPMENT IN NIGERIA FROM 1980-2017 USING DATA FROM CENTRAL BANK OF NIGERIA STATISTICAL BULLETIN 2018