Examining the Ricardian Equivalence Hypothesis in Nigeria using an ARDL bound testing approach

Osodiuru, Peter Ekelem C and Odo, Augustine Chika and Ugwuoke, Augustine Chika and Chikwendu, Nneka Francisca (2018) Examining the Ricardian Equivalence Hypothesis in Nigeria using an ARDL bound testing approach. International Journal of Scientific Research and Innovative Technology, 5 (8). pp. 45-59. ISSN 2313-3759

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Abstract

This study examined the Ricardian equivalence hypothesis (REH) in Nigerian using data for the periods of 1986 to 2015. The study employed a bound testing approach to cointegration and error correction model within the context of the Auto-Regressive-Distributed-Lag (ARDL) framework developed by Pesaran and Shin (1995, 1999). The study examined whether a long-run equilibrium relationship exists between Private Consumption and Gross Domestic Product (GDP), Government expenditure, Tax Revenue, Total Public Debt and Interest Payments. The results show that there is long run association running from Gross Domestic Product (GDP), Government Expenditure, Tax Revenue, Total Public Debt and Interest Payments to Private Consumption. More importantly, the study found strong evidence against the Ricardian Equivalence in Nigeria and support for Keynesian debt non-neutrality. The findings therefore imply that fiscal policy has a role in macroeconomic stabilization in Nigeria.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 25 Apr 2019 10:47
Last Modified: 25 Apr 2019 10:47
URI: http://eprints.gouni.edu.ng/id/eprint/1276

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