ABSTRACT

This study examine the effect of fiscal policy on consumption in Nigeria (1981 – 2014) ordinary least square (OLS) and ADF were employed for this research work showing that all the variables are stationary at first difference making cointigration test possible to find out the long run relationship between the variable, more so Error correction model (ECM) also test the short & long run relationship. The major findings of this research work is that there exist a negative relationship between liquidity ration and money supply and inflection rate in Nigeria will monetary policy rate has a positive relationship with inflection rate in Nigeria. It is equally observed that all variables of interest have insignificant relationship with inflection rate in Nigeria. Recommendation was suggested to the government based on findings of the research work.