<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study examined the direct/indirect long-run relationships and dynamic interactions between public investment (PI) and output performance in Nigeria using annual data spanning 1970-2010. A macro-econometric model derived from Keynes’ income-expenditure framework was employed. The model was disaggregated into demand and supply sides to trace the direct and indirect effects of PI on aggregate output. The direct supply side effect was assessed using the magnitude of PI multiplier coefficient, while the indirect effect of PI on the demand side was evaluated with marginal propensity to consume, accelerator coefficient and import multiplier. The results showed relatively less strong direct effect of PI on aggregate output, while the indirect effects were stronger with the import multiplier being the most pronounced. This is attributed to declining capital expenditure, poor implementation and low quality of PI projects due to widespread corruption. By and large, we concluded that PI exerted considerable influence on aggregate output.</p></abstract>

This study examined the direct/indirect long-run relationships and dynamic interactions between public investment (PI) and output performance in Nigeria using annual data spanning 1970-2010. A macro-econometric model derived from Keynes’ income-expenditure framework was employed. The model was disaggregated into demand and supply sides to trace the direct and indirect effects of PI on aggregate output. The direct supply side effect was assessed using the magnitude of PI multiplier coefficient, while the indirect effect of PI on the demand side was evaluated with marginal propensity to consume, accelerator coefficient and import multiplier. The results showed relatively less strong direct effect of PI on aggregate output, while the indirect effects were stronger with the import multiplier being the most pronounced. This is attributed to declining capital expenditure, poor implementation and low quality of PI projects due to widespread corruption. By and large, we concluded that PI exerted considerable influence on aggregate output.

Public Investment and Output Performance: Evidence from Nigeria

Omo Aregbeyen is at Department of Economics, University of Ibadan, Ibadan, Nigeria.

Taofik Ibrahim Mohammed is at Nigerian Institute of Social and Economic Research (NISER), Ibadan, Nigeria.

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Public Investment and Output Performance: Evidence from Nigeria"}

This study examined the direct/indirect long-run relationships and dynamic interactions between public investment (PI) and output performance in Nigeria using...

Public Investment and Output Performance: Evidence from Nigeria

Published Online: May 20, 2016

Page range: 1 - 24

DOI: https://doi.org/10.1515/zireb-2016-0001

Keywords
Public Investment, Output performance, income-expenditure framework, Macro-econometric simulation, Nigeria

© 2016 Omo Aregbeyen et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Public Investment and Output Performance: Evidence from Nigeria

Published Online: May 20, 2016

Page range: 1 - 24

DOI: https://doi.org/10.1515/zireb-2016-0001

KeywordsPublic Investment, Output performance, income-expenditure framework, Macro-econometric simulation, Nigeria

© 2016 Omo Aregbeyen et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Public Investment, Output performance, income-expenditure framework, Macro-econometric simulation, Nigeria