Abstract:
This study aims at investigating the long run and causal relationships
between public expenditure and economic growth in Nigeria. The study uses annual
time series dataset for a sample of 39 years from 1970 to 2008, on the basis of data
availability. To achieve this objective, Johansen (1988) cointegration approach and
Granger causality test have been applied. The results indicate a significant long run
positive relationship between public expenditure and economic growth in Nigeria.
Similarly, from the results, it is concluded that there is a significant positive long
term relationship between population growth rate and economic growth in Nigeria.
Furthermore, the results of Granger causality test indicate a weak significant
bidirectional causality at 10% level, running from public expenditure to economic
growth and in turn, from economic growth to public expenditure. This has the
implication that, policies that will promote sustainable economic growth and public
expenditure may be pursued concurrently
