Investment behaviour in the Nigerian economy: a macroeconometric investigation of the impact of stabilization policies

In the study the relatioilship between. priva te investment and i ts
proxima te determinan ts are analysed. Specif.ically the effects 'of
fiscal and monetary poli ci es on investment are investigated. The
distortions in the approach to the various pol.icies are
highlighted. Simple aggregative models based on the neoclassical
theory of investment are used to analys~ the effects of the various
policies/ as well as the time structures of the response of private
investment to these polic_ies. Our findings suggest . the the
impacts of macroeconom.ic policies on priva te investment spending in
Nigeria are small and wi th fair ly .long lags. Prom the findings / an
argument is provided in support· of the ·adoption of the indirect
monetary control system and the liberallzation of interest rates/
as well as increased government ca.Pi tal spending/ which provide the
necessary complementarities with privat~ investment.