Pages: (82-107 )
Abstract
This study focuses on the policy-mix that drives agricultural output growth in Nigeria. The study utilizes VECM and ARDL techniques to estimate time series data spanning from 1981 to 2020. The results reveal that money supply contributes 1.14% to the forecast error variance in agricultural output in the second year and it attains its peak of 3.1% in the third year before decreasing to 1.39% in the tenth year. Government expenditure accounts for 0.003% of the forecast error variance in agricultural output in the second year and it reaches its peak of 5.63% in the third year before decreasing steadily to 1.23% in the tenth year. Also, the interactive effect of government expenditure and money supply on agricultural output is positive and significant; implying that fiscal and monetary policies act as complement for agricultural output performance in Nigeria. Thus, the two-policy measures should be coordinated to maximize agricultural output.
Keywords: Fiscal policy, Monetary policy, Economic policy, Agricultural output, Vector error correction model,