Counter-factual Analysis of the Nigerian Economy: A Test of the Relative Potency of Monetary and Fiscal Policies
Egwaikhide Christian Imoudu; Enoma Anthony; Saheed, Zakaree

Abstract
There has been a prolonged and heated debate or controversy among economists and policy makers over the degree and relative superiority of monetary and fiscal policies on counter-cyclical output stabilization in an economy. This study examines, estimate, and evaluate the relative impact of monetary and fiscal policies on some macroeconomic aggregates in the Nigerian economy. It equally specifies and constructs a structural model of the Nigerian economy. Using the techniques of ordinary least squares, historical and policy simulation, it concludes that monetary policy is more potent for counter-cyclical output stabilization in Nigeria. In the long-run fiscal policy is more germane than monetary policy because monetary policy weakens as the time progresses.

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