2025-03-27https://repository.covenantuniversity.edu.ng/handle/123456789/32892This paper builds and estimates a model of national income (proxied by the gross domestic product, GDP), with a view to testing the impact of monetary and fiscal policies on aggregate demand and economic growth. The estimation technique used is the Error Corre.:tion Model (ECM). This approach points to the existence of a long-run equilibrium in the growth of real GDP as ajimction ofmoney supply, export and other regressors in the period I 970- 2003. The empirical results tend to suggest non-neutrality of monetary policy while fiscal policy appears to corroborate thepolicy ineffectiveness proposition (PIP). From the findings it is apparent that regulatory authorities need a judicious combination ofmonetary andfiscal policies in order to ensure long-run economic growth.application/pdfHB Economic TheoryBook Section