FISCAL POLICY DYNAMICS, UNEMPLOYMENT AND TRADE IN WEST AFRICA
- J.O. Saka
- D.B. Olanipekun
- A.G. Johnson
- ( paper pages. 51 - 71 )
Abstract
This paper examined the link between the dynamics of fiscal policy, unemployment and trade in West Africa in the period 1991-2018. Thetheoretical framework emanated from public finance and Mundell-Fleming theories to capture both fiscal policy-unemployment and fiscal policy-trade relations. Two equations were specified – the unemployment and trade equations, in which fiscal policy measure was a major determinant. Trade was captured by ratio of trade to GDP, while unemployment rate data captured unemployment cases. Government expenditure and tax revenue were two variants of fiscal policy measures used as explanatory variables among other controlled variables. The methodology was based on pooled least squares which corrected for problem of data inadequacy experienced in some West African countries. The results showed that government expenditure and revenue from tax performed below expectation and, in some cases, gave contrary signs amidst rising unemployment and low trade performance. Hence, substantial increase in government expenditure toward infrastructural development would reduce unemployment rate in West Africa.
Citation
J.O. Saka, D.B. Olanipekun, A.G. Johnson.
2021.
"FISCAL POLICY DYNAMICS, UNEMPLOYMENT AND TRADE IN WEST AFRICA"
The Nigerian Journal of Economic and Social Studies,
63 (1): 51 - 71.
JEL Classification
E24, E62, H30, J60
