The effect of fiscal policy on the size of the informal sector in Nigeria
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | The effect of fiscal policy on the size of the informal sector in Nigeria | |
| Creator | Solomon, Offiong H. | |
| Description | This paper adapts a dynamic real business cycle model to examine the effect of fiscal policy on the relative size of the informal sector in Nigeria. The motivation for this paper is to provide an economic intuition on how fiscal policy has contributed to the growth of the informal sector. The results of the model show the presence of an inverted U-shaped relationship between the tax rate and the size of the informal sector. It also predicts that for a given tax rate below a threshold of 30%, public capital stock contributes to an increase in the size of the informal sector and vice versa. The theoretical predictions of the model are supported empirically using data from Nigeria between 1980 and 2000. The model finally shows that there is a proportional relationship between the agent’s welfare and the size of the informal sector. | |
| Publisher | AOSIS | |
| Date | 2011-10-31 | |
| Identifier | 10.4102/jef.v4i2.319 | |
| Source | Journal of Economic and Financial Sciences; Vol 4, No 2 (2011); 237-256 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/319/402
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