Fasanya department of economics, university of ibadan, ibadan, nigeria adegbemi b. The major objective of this study is to empirically analyze the impact of monetary policy on the economy of nigeria. It does seem as if the policy reaction function has not enjoyed the same level of interest by intellectuals, leaving a gap in. This page provides nigeria money supply m2 actual values, historical data, forecast, chart, statistics, economic calendar and news. This study investigated the impact of fiscal and monetary policy on nigerian economic growth from 1981 to 2015, with the interest in exploring which of fiscal or monetary policy has been effective in propelling economic growth in nigeria and how gdp growth responds to the monetary and fiscal policy shock. Notable researchers in the field of monetary economics in nigeria have tried through their researches to unravel those inbuilt stabilizers in the economy that are very prone to stimulation of the monetary policy administration.
The last article iv executive board consultation was on march 27, 2019. In the same vein, olawunmi and ayinla 2007 examined the contribution of fiscal policy in the achievement of sustainable economic growth in nigeria using slow growth model estimated with the use of ordinary least square ols method. Each edition of the ner includes a macroeconomic overview and gives special attention to an additional topic of high policy relevance. Monetary policy cooperant factors do not have significant impact on economic growth in nigeria. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. This paper discusses the evolution of monetary policy in nigeria in the past four decades. Specifically, the existence of fiscal dominance, a persistent liquidity overhang, an. Nigerian economy among others reveal that a the central bank of nigeria is. Apr 16, 2020 the three objectives of monetary policy are controlling inflation, managing employment levels, and maintaining long term interest rates. This thesis investigates the effectiveness and costs of an ncmtype monetary policy in nigeria.
The trend between inflation and economic growth in nigeria the facts and figures obtained from the imf world economic outlook report 2011 revealed that the nigerias gdp tends to be low when the inflation rates are high apart from a few years of the 80s. Annual economic report promoting global monetary and financial stability issn 26169436 isbn 9789292591748 bank for international settlements bis. However, contents may be cited, reproduced, stored or transmitted without permission. This is because the statute books are replete with dormant rules and regulation. Monetary policy and economic policy scientific papers. This is a cause of concern because nigeria, like any other country, aims to maintain a. Olanipekun emmanuel falade, benjamin ayodele folorunso. In nigeria, government has always relied on monetary policy as a way of achieving certain economic objective in the economy such macroeconomic objectives. Objectives of the study achieving price stability and ultimately economic growth is the major objective of monetary policy. Nigeria has had robust debates on monetary economics for years.
The impact of monetary policy on the economic growth of. Bejamin adegbola part time lecturer, lagos state university and obaka abel inabo economics department, national open university of nigeria course editor dr. Thus this paper focuses on the use of monetary policy to check inflation in nigeria. Nigeria has over the years been controlling her economy. An empirical trend analysis onyemaechi joseph onwe, ph. Fiscal and monetary policy instruments and economic growth sustainability in nigeria. The impact of monetary policy on the economic growth of nigeria. The journal of monetary economics publishes important research contributions to a wide range of modern macroeconomic topics including work along. Nigeria like many countries in the world today is currently experiencing an overall balance of payments deficit, which has provoked many questions on potential causes of this imbalance. Essentially, it is a systematic study of the implications of monetary policy in nigeria, while paying attention to the peculiarities of the nigerian economy and using a rigorous uptodate framework. The federal reserve uses monetary policy to manage economic growth, unemployment, and inflation. Economic indicators for nigeria including actual values, historical data charts, an economic calendar, timeseries statistics, business news, long term forecasts and shortterm predictions for nigeria.
Policy and its theoretical basis keith bain principal lecturer, east london business school university of east london peter howells professor of economics, east london business school university of east london. Department of economics university of lagos 1 1 4756. The contribution of monetary policy to economic growth lucas papademos, vicepresident of the european central bank, 31st economics conference, vienna, 12 june 2003. Monetary policy is the deliberate use of monetary instruments direct and indirect at the disposal of monetary authorities such as central bank in order to achieve macroeconomic stability macroeconomic stability refers to achievement of. Proposal the nigeria economy has been experiencing over the years the problems of unemployment, price level instability, lack of sustainable economic growth, balance of payment disequilibrium, inability to mobilize domestic saving and unsatisfactory expansion of domestic output. Formulation and implementation challenges by central bank of nigeria ezema, charles chibundu, phd monetary policy department, central bank of nigeria african institute of applied economics aiae. Pdf the study investigated effect of monetary policy on economic growth in nigeria. Monetary policy rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money. Fiscal and monetary policy instruments and economic growth. The impact of monetary policy rate on inflation in nigeria. These notes and ebook on monetary economics have been prepared by experienced commerce faculty and toppers and will provide you with easy to.
Babajide, isibor areghan akhanolu and okafor tochukwu. Growth appeared to gather pace somewhat in the final quarter of 2019, after quickening activity in both the agricultural and industrial sectors propped up a modest expansion in the third quarter. The chequered history of the nigeria monetary policy has created a visible asymmetry in the two known monetary regimes before and after sap in the country. The influence of money supply, average price, interest rate and labour force were tested on gross domestic product using the multiple regression models as the main. Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very shortterm borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency. Their results reveal that government total capital expenditure, total.
A global perspective era dablanorris, kalpana kochhar, nujin suphaphiphat, frantisek ricka, evridiki tsounta. If youre looking for a free download links of monetary economics pdf, epub, docx and torrent then this site is not for you. Nigeria has over the years been controlling her economy through various. Monetary policy is the deliberate use of monetary instruments direct and indirect at the disposal of monetary authorities such as central bank in order to achieve macroeconomic stability macroeconomic stability refers to achievement of internal and external balance. Pdf effect of monetary policy on nigerian economy researchgate.
Nigeria economy gdp, inflation, cpi and interest rate. Monetary policy refers to the specific actions taken by the central bank to regulate the value, supply and cost of money in the economy with a view to achieving. Archival data sourced from central bank of nigeria statistical bulletin was used for the estimation of the variables. Their major objective was to reestimate and reexamine the relative effectiveness of fiscal and. Pdf the fiscalmonetary policy and economic growth in. For example, in 1998 gdp growth rate was relatively high amidst the. In nigeria, the monetary policy is the macroeconomic policy laid down by the central bank of nigeria. The relative effectiveness of fiscal and monetary policy in macroeconomic management in nigeria. Monetary policy spillovers through industrial growth in. Department of economics, faculty of social sciences, obafemi awolowo university, ileife, nigeria. Enquiries concerning this publication should be forwarded to.
Our understanding of how these monetary variables exchange rate, monetary rate, bank rate and credit rate relate with our economic growth will provide insights. It does this to influence production, prices, demand, and employment. Abata, matthew adeolu department of accounting and finance, faculty of management sciences, lagos state. The economic reforms and prudent policies have contributed to the consolidation of. Central bank of nigeria interest rate in nigeria is expected to be 12. Pdf the major objective of this study is to empirically analyze the impact of monetary policy on the economy of nigeria. It is the demand side economic policy implemented by the government to achieve macroeconomic objectives like growth, consumption, liquidity and inflation.
The result of this study does not support the assertion that a tight monetary policy coupled with a contractionary fiscal policy will engender natural rate of growth of the nigerian economy. Director, monetary policy department, central bank of. Therefore, this study, the determinants of inflation in nigeria, will be studied using monetary policy variables broad money supply, exchange rate, one year treasury bill rate and monetary policy rate. Price stickiness along the income distribution and the effects of monetary policy. Pdf effect of monetary policy on economic growth in. The course is taught jointly by economics department faculty and our two acting instructors. One of the major objectives of monetary policy in nigeria is stabilization of economic growth. Hey folks, on this thread, i have shared the pdf lecture notes for the b.
The impact of fiscal and monetary policy on nigerian economic. This paper examines the impact of monetary policy on the nigerian economy. This project seeks to evaluate the effectiveness of the cbns monetary policy by assessing the extent to which the monetary policies have impacted on the growth process of nigeria using the major objectives of monetary policy as yardstick. Generally, this study will dwell on the overview of monetary policy situations in the nigerian economy. The central bank of nigeria cbn, however, has made efforts to fight it using different policy measures, of which monetary policy is one of them. This has led to reduction in the standard of living of nigerians. Overall, the socioeconomic and political milieu, including the legal framework under which the central bank of nigeria has operated, was found to be the critical factor that influenced the outcome of monetary policy. To achieve this major objective, the study made use of broad money supply m2. Nigeria s economy is still recovering from the substantial termsoftrade shock that triggered the 2016 recession. The institutional framework for monetary policy in nigeria 18 7. Nigeria interest rate data, historical chart, forecasts and calendar of releases was last updated on april of 2020.
The monetary environment in nigeria is very unstable in the recent past, with the economy being vulnerable to shocks from volatile commodity price. Recent journal of monetary economics articles recently published articles from journal of monetary economics. Monetary theory and policy national open university of. To conduct monetary policy, some monetary variables which the central bank controls are adjusteda monetary aggregate, an interest rate or the exchange ratein order to affect the goals which it does not control. Ascertain the effect of monetary policy on cooperant factors in economic growth in nigeria. Louis introduction the question of the effectiveness of monetary policy is a longstanding issue in the literature of monetary economics and central banking.
The study examined the effects of financial inclusion on economic growth in nigeria from 2000 to 2018. This has lead to the introduction of instruments of monetary policy to regulate the value, supply and cost of money in. Monetary policy formulation and implementation is the responsibility of the central bank of nigeria cbn, established in 1958 through the central bank of nigeria act 1958. Despite the increasing emphasis on manipulation of monetary policy in nigeria, the problem surrounding its.
This paper assesses how fiscal and monetary policies influence economic growth and development in nigeria. Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very shortterm borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency unlike fiscal policy which relies on government to spend its way out of recessions, monetary policy aims to. The impact of fiscal and monetary policy on nigerian. Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme. Monetary policy and its effectiveness on economic development. The paper argues that curbing the fiscal indiscipline of government will take much more than enshrining fiscal policy rules in our statute books. Fiscalmonetary policy and economic growth in nigeria. The economic recovery and growth plan ergp, a medium term plan for 2017 2020, builds on the sip and has been developed for the purpose of restoring economic growth while leveraging the ingenuity. Monetary policy involves the management of money, the supply of money and interest rate. This paper assesses how fiscal and monetary policies influence economic growth and.
The fed implements monetary policy through open market operations, reserve requirements, discount rates, the federal funds rate, and inflation targeting. Recent journal of monetary economics articles elsevier. Look at the evidence on price rigidities gathered in klenow and malin monetary economics handbook survey, on my webpage. Inflation is a major problem facing nigeria as a country today. Monetary economics hand written notes, pdf ebook for bcom. An econometric analysis of the monetary policy reaction. Pdf this study assessed the effect of monetary policy instruments on economic growth in nigeria using data obtained from central bank of. Monetary policy and its effectiveness on economic development in. Adefeso and mobalaji 2010 wrote on the fiscal monetary policy and economic growth in nigeria. Monetary economics is the branch of economics that studies the different competing theories of money. Over the past two years, the rebound in oil prices, a tight monetary policy, and a convergence in foreign exchange windows have helped reduce inflation and rebuild external buffers. Examine the effect of monetary policy on inflation in nigeria. International monetary fund 1 june 2015 sdn15 i m f s t a f f d i s c u s s i on n o t e causes and consequences of income inequality. However, due credit must be given to the central bank of nigeria.
A course in monetary economics sequential trade, money, and uncertainty 2005bybenjamineden 350mainstreet,malden,ma021485020,usa. The contribution of monetary policy to economic growth. Expansionary monetary policy increases the growth of the economy, while contractionary policy slows economic. The dependent variable of financial inclusion proxied by contribution of financial institutions to gross domestic product gdp was regressed on the explanatory variable of. Overview of the nigerian economy african development bank. Fiscal and monetary policy and economic growth in nigeria. Impact of monetary policy on inflation control in nigeria.
A monetary theory is a set of ideas about how monetary policy should be conducted within an economy. Ajayi 1996 concentrated on the industrial sector of the economy. Economic indicators for nigeria including actual values, historical data charts, an economic calendar, timeseries statistics, business news, long term forecasts and shortterm predictions for nigeria economy. International journal of academic research in economics and management sciences september 2012, vol. Overview of the nigerian economy economic and social environment since 2003, the government of nigeria has sustained farreaching economic reforms at the federal level, particularly in public finance management, and the financial sector. Pdf the impact of fiscal and monetary policy on nigerian. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. The purpose of this chapter in the handbook of monetary economics is to reconsider the role of. First year subject monetary economics of third year students. This semester the course discusses developments in international economics, the economics of immigration, the economics of corruption, internet platform competition and online markets, monetary. A comparative analysis emmanuel elakhe masters thesis economics other publish your bachelors or masters thesis, dissertation, term paper or essay. However, persistent structural and policy challengesincluding a large infrastructure gap, low.
O onakoya department of economics, tai solarin university of education, ijagun, nigeria mariam a. To achieve this major objective, the study made use of broad money supply m2 and credit to the private sector cps as the independent variables explaining the dependent variable which is the gross domestic product gdp. They used disaggregated analysis in an attempt to unravel the impact of government expenditure on economic growth. The nigerian economic report ner is a regular publication of the world bank. Department of economics, faculty of social sciences, university of port harcourt, nigeria. The act made the formulation and execution of monetary policy the exclusive responsibility of the cbn. I am delighted at the opportunity to speak at this years economics conference organised by the oesterreichische nationalbank. This study investigated the impact of fiscal and monetary policy on nigerian economic growth from 1981 to 2015, with the interest in exploring which of fiscal or monetary policy has been effective in propelling economic growth in nigeria and how gdp. This work examined the extent to which the central bank of nigeria monetary policies could effectively be used to promote economic growth, covering the period of 19902011. The journal of monetary economics publishes important research contributions to a wide range of modern macroeconomic topics including work along empirical, methodological and theoretical lines. Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme 5 governments fiscal deficit expands above budget. Fiscalmonetary policy and economic growth in nigeria hrmars.
Monetary policy and its effectiveness on economic development in nigeria author akinjare victoria, a. In the history of intellectualism in the country, estimating money demand functions almost became an industry, giving rise to the tatoo1 phenomenon. Pdf effects of financial inclusion on economic growth in. I also taught earlier versions at florida state university first year ph. I wrote this book while teaching monetary economics during the period 19872002 at the joint master program of the technion and the university of haifa. Nigerian government has adopted various monetary policies through central bank of nigeria over years to achieve economic growth. D school of management sciences national open university of nigeria abstract the role of fiscal policies in the development of emerging economies has been a major source of concern in economic literature. Years after the structural adjustment programme sap, the nigeria economy grew to become the. In the history of intellectualism in the country, estimating money demand functions almost.
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