Abstract

This paper investigates the presence or otherwise of fiscal dominance in Nigeria during the period of 1986-2013 using structural VAR analysis. Annual secondary data were used for the study. Data on fiscal deficits and monetary base were obtained from the publication of Central Bank of Nigeria Statistical Bulletin. The results show that shock to fiscal deficits of government does not stimulate response from the growth of monetary base. In addition, the results show that there exists no causality running from fiscal deficits to growth of monetary base in Nigeria. The study concludes that there is no evidence of fiscal dominance in Nigeria during the study period.

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