State Dependence and Fiscal Multipliers in Nigeria: An Empirical Analysis

The study investigated the state- dependent effect of fiscal multipliers in Nigeria. We considered the performance of fiscal multipliers in the recession and, also during oil boom. Data for the study was drawn from 1985 to 2023 and employed the Fully Modified OLS, in order to correct the problem of serial correlation and endogenity. The finding showed that government spending exerted statistical and economically impact on the economy. Similarly, the finding of the study showed that there is strong Keynesian effect during recession and oil boom. Lastly, the finding showed that oil boom has not significantly affected the economy. The study therefore recommended that there is need for fiscal discipline in Nigeria and strong formal institutions, in order to ensure that spending during recession and oil boom is properly channeled into productive activities.