Output Fluctuations and Macroeconomic Policy in Nigeria Trends Analysis and Policy Implication for Attainment of NEEDS and MDGs in Nigeria

Abstract

This paper examines the trends and patterns of fluctuations in real output growth in Nigeria. The paper used simple statistical tools to analyse the links among the macroeconomic variables. The analysis shows that real output experienced its full business cycle and growth rate of 1970s remained unsurpassed despite the array of policy reforms and palliatives introduced after the recession in the 1980s. However; there is strong evidence that the power of both monetary and fiscal policy to track output growth and fluctuation is reduced at a higher degree of economic openness. The paper concludes that the cause of real output fluctuation may be externally induced and macroeconomic policy plays little role in real output fluctuation in Nigeria. Thus to achieve the national economic empowerment and development strategy (NEEDS) and MDGs, it is imperative for Nigerian government to redirect attention from public oriented to private sector driven approach of economic management.

Keywords: Macroeconomic Policy, Output Fluctuations, Trade Openness