IMPACT OF SUCCESSIVE BUDGETS ON NATIONAL DEVELOPMENT. Saibu, M. Olufemi PhD. Department of Economics, University of Lagos, Akoka , Lagos. email: email@example.com. The Outline of the Presentation. Introduction Theoretical link between Budget and the Economy
Saibu, M. Olufemi PhD.
Department of Economics,
University of Lagos, Akoka, Lagos.
3. Erect public works and institution that may be unprofitable for individuals
The success of most of the Asian economies that experienced higher growth rate had been attributed to the effective use of this budget instrument in stimulating both domestic and inward investment in these economies.
Y = Aggregate output/income
C = Consumption of goods and services
G = Government expenditure
X = Exports
M = Imports.
If policy increases aggregate demand then fiscal stance is expansionary and or reflation.
The inflationary components of the National Income are Investment Expenditure, Exports Earnings and Government Expenditure (I, X and G) while the deflationary components are Savings, Imports and Taxes (S, M and T).
, this is the multiplier
The concept of foreign saving can be approached from two different directions.
Discretionary fiscal changes are deliberate changes in direct and indirect taxation and government spending – for example a decision by the government to increase total capital spending on the road building budget or increase the allocation of resources going direct into the NHS.
Automatic fiscal changes are changes in tax revenues and government spending arising automatically as the economy moves through different stages of the business cycle.
These changes are also known as the automatic stabilizers of fiscal policy (that is changing the (t))
The impact of government budget is much dependent on the stance of the government in term of their perception about the economy.
----- ( Amnesty, Youwin, NAPEP)
The budget must be stability oriented. Macroeconomic policy must seek for example improvement in the indicators such as inflation, debts and exchange rate.
The government must adopt a public finance strategy that is credible and consistent with reality on ground in the Nigerian economy.