Title Impact of fiscal policy on investment and consumption expenditure /
Translation of Title Fiskalinės politikos poveikis investavimui ir vartojimo išlaidoms.
Authors Adewunmi, Halimah Adetutu
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Pages 57
Keywords [eng] Fiscal policy, consumption expenditure, investment expenditure, west Africa, Consumer Price Index, gross national income per capita, Government Revenue, Gross domestic products, Government expenditure, Interest rate, Inflation rate.
Abstract [eng] The main purpose of this master thesis is to establish the nature and direction of causation between fiscal policy instruments, investment and consumer expenditures in West Africa, as well as the influence of fiscal policy on these spending categories. The Master thesis consists of three main parts: the analysis of literature, the research methodology, the research analysis and its results, conclusions, and recommendations. Literature analysis reviews the development of investment and consumption expenditure theories and its implications, presents how fiscal policy works and its purposes and shows the importance of fiscal policy as well indicates how it further impacts investment and consumption expenditure in West Africa. Following the literature analysis, the author carried out the research into the impact of fiscal policy on investment and consumption expenditure in west Africa using five (5) west African countries amongst the 16 west African countries due to limitation such as data constraints, inaccurate data. These five west African countries were selected using convenient sampling technique and it covers the period of 2011-2020. The results of the research were statistically processed with the E-views statistical analysis tool. A multiple regression model is specified in the study and the estimation technique employed in this paper is the ordinary least squares (OLS) method. The results of the research were compared to the related studies carried out in other regions in Africa. The research revealed that there is a positive and significant relationship between fiscal policies and Investment expenditure. This study further revealed a positive and significant relationship between government revenue and consumption expenditure. Interest rate was discovered to exhibit a negative but significant effect on Investment expenditure. The study also revealed a negative and insignificant relationship between Consumer Price Index, gross national income per capita and Consumption expenditure. The conclusions and recommendations summarise the main concept of literature analysis as well as the results of the performed research. The author believes the result of the study could give useful guidelines to the Government of the West African countries on how the government can use an expansionary fiscal policy to encourage increase in investment in West Africa and government spending should be channeled to capital projects and social overhead capital that will encourage investment, such as constant electricity supply and good road networks. It is also recommended that the government should formulate policies that can help to curtal inflation rate to a single digit overtime, while also regulating interest rate to its barest minimum.
Dissertation Institution Vilniaus universitetas.
Type Master thesis
Language English
Publication date 2023