Budget deficit and selected macroeconomic variables in Nigeria: A toda-yamamoto causality approach
This study examined the relationship between budget deficit and macroeconomic variables in Nigeria for the quarterly period of 1970 -2011. The study employed the augmented Granger causality test approach developed by Toda and Yamamoto (1995). The result showed a strong unidirectional causality from budget deficit to macroeconomic variables in Nigeria. The result supported the Keynesian proposition. Also the evidence from Johansen co-integration result indicated that there is a positive long run relationship between budget deficit and macroeconomic variables.