BUDGET DEFICIT, CONSUMPTION PRICE, AND MACROECONOMIC PERFORMANCE IN WEST AFRICA MONETARY ZONE
Sayuti Abdullahi Shafii and Danladi Jonathan
Volume 3 Issue 2
Abstract
The paper analyzed relations between Budget Deficit, Consumption Price and Macroeconomic Performance in West Africa Monetary Zone; using Autoregressive Distributive Lag (ARDL) Bounds testing approach for long run relationship and Error-Correction Model (ECM) for short run dynamics. The bound tests of ARDL revealed the presence of co-integration among the variables. The estimated ARDL showed that budget deficit is positive and statistically significant in Ghana while Nigeria has the opposite and real effective exchange rate was negative in both countries but significant in Nigeria. The consumption price in both countries was positive and statistically significant. Likewise, in the short run budget deficit were not significant in both countries though real effective exchange rate and consumption price were statistically significant. Keywords: Budget deficit, Consumption price, Macroeconomic performance, WAMZ.
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