The International Journal of Applied Economics and Finance1991-08862077-2149Asian Network for Scientific Information10.3923/ijaef.2007.88.96M.O. Saibu S.I. Oladeji 2200712This study investigates the asymmetric effects of monetary and fiscal policies on the real output growth in a small open economy. It is a country-specific, time series study that verifies whether there is difference in the effect of expansionary and contractionary policy shocks on real fluctuations in Nigeria. A modified GARCH model was used to assess the asymmetric effects of policy shocks on real aggregate and sectoral output measures. The empirical results showed that the level of aggregation also had implication of the asymmetric effects of fiscal and monetary policy shocks in Nigeria. Another important observation was that monetary policy in most of the output measures was negative and insignificant, but the fiscal policy had asymmetrical positive effects in most cases. This implies that in an open Nigeria economy, fiscal and monetary policies were not symmetrical in effects on real output growth; expansionary monetary and fiscal policies generally were found to reduce output growth while contractionary policies of both monetary and fiscal had boosted on output growth in Nigeria. This is in consonance with earlier works in this area. The policy implication of the finding is that to attain sustainable real growth, appropriate policy mix should be designed and implemented.]]>Afxentiou, P. and A. Serletis, 2000Akinlo, A.E., 2003Anyanwu, J.C.,1999Cover, J.P., 1992Demery, D. and W. Duck,2000Engle, R.F.,1982Fu, L., F.D. Taylor and M.K. Yucel,2003Holmes, M.J. and P. Wang,2000Hoppner, F., C. Meltzer and T. Neumann,2004Jha, R. and K. Donde,2001Karras, G.,1996Karras, G., 1999Karras, G., 1999Karras, G. and H. Stokes,2004Karras, G., 1996Musonda, A., 2001Nnanna, J.O., 2002Nwaobi, G.C., 1999Odedokun, M.O., 1991Okoh, R.N., 2004Oyejide, A.T., 2002Parker, R. and P. Rothman,2004Romer, D., 1993Saibu, M.O. and S.I. Oladeji, 2004Senda, T., 2001Sogo-Temi, J.S., 2001Yu, C., 2003Zhang, S.,2003Bollerslev, T.,1986