Impact of Fiscal and Monetary Policies on the Performance of the Nigerian Stock Market

Authors

Abraham Ochoche, Central Bank of Nigeria
Tari M. Karimo, Central Bank of Nigeria

Keywords

Autoregressive distributed lag, Fiscal policies, impact, monetary policies, stock market

Abstract

This paper examines the impact of the interaction between fiscal and monetary policy on Nigeria's stock market performance for the period 2011:M11 — 2019:M12. Bounds test results indicate a run relationship among the variables. Further results indicate that Nigeria's all-share index increases with government expenditure in the short- and long-run, but increases with the interest rate in the short run only. Government revenue hurts AS in the short run, suggesting that the revenue-generating activities of government cause a crowding-out effect in the market. The study therefore recommends the synchronisation of both policies in any model intended for formulating stock market policy because the interactions of both policies affect the behaviour of the stock market in Nigeria.

Author Bio

Abraham Ochoche works in the Development Finance Department, Central Bank of Nigeria, and Tari M. Karimo works in the Statistics Department, Central Bank of Nigeria.

Issue

1

Volume

47

First Page

46

Last Page

64

Recommended Citation

Ochoche, Abraham and Karimo, Tari M. (2023) "Impact of Fiscal and Monetary Policies on the Performance of the Nigerian Stock Market," Bullion: Vol. 47: No. 1, Article 4.
Available at: https://dc.cbn.gov.ng/bullion/vol47/iss1/4