Impact Of Monetary Factors On Nigeria’s Economic Growth

Author(s)

Chigbu, E.E. (Phd) , Ebiringa, Oforegbunam. Thaddeus ,

Download Full PDF Pages: 85-100 | Views: 368 | Downloads: 105 | DOI: 10.5281/zenodo.3401885

Volume 1 - October 2012 (10)

Abstract

Studying the impact of monetary factors on Nigeria’s economic growth has become imperative in the face of the challenges of excess liquidity, poor access to credit, high cost of capital, inflation, and decreasing rate of economic growth. Hence this paper applied econometric modeling in the development of a prediction model for economic growth using critical indices of monetary policy. The results show that there is a significant relationship between money supply, foreign exchange rate and economic growth in Nigeria. However, the possibility of convergence of short-run dynamics of monetary policy factors to long-run equilibrium in economic growth was established. Though, the speed of adjustment with respect to foreign exchange rate was observed to be slow. 

Keywords

Cumulative density function, PP Test, Granger causality, Monetary Factors, Exchange rate, money supply.

References

  1. Ackley, G. (1978) Macroeconomics: Theory and Policy. New York: Macmillan.
  2. A. Ahmed (1991) “Indirect Monetary Control in Nigeria, Problems and Prospects”. CBN Research Department Occasional Papers, No. 1 December 2.
  3. A. O. Folawewo and T. S. Osinubi (2006) “Monetary Policy and Macroeconomic Instability in Nigeria: A Rational Expectation Approach”. Journal of Social Science, Vol. 12, No. 2, pp.93-100.
  4. Central Bank of Nigeria (2010) Annual Report and Statement of Accounts. Abuja: Central Bank of Nigeria.
  5. Central Bank of Nigeria (2009) Statistical Bulletin. Abuja: Central Bank of Nigeria.
  6. C. I. Kogar (1995) “Financial Innovations and Monetary Control”. The Central Bank of The Republic of Turkey Discussion Paper, No. 9515, May.
  7. Mohsin (2005). Inflation in Pakistan: Money or Wheat, Paper presented in SBP conference.
  8. J.C. Anyanwu (1996) Monetary Economics: Theory, Policy and Institutions. Hybrid Publishers Limited, Nigeria.
  9. K. F. Duncan, and M. Sidrauski (1971) Monetary and Fiscal Policy in a Growing Economy.
  10. L. Afolabi (1991) Monetary Economics. Heinemann Educational Books (Nigeria) Plc.
  11. M. Friedman and A. Schwartz (1963) “Money and Business Cycles”, Review of Economics and Statistics, February, pp. 32-64.
  12. M. Gertler and S. Gilchrist (1991) “Monetary Policy, Business Cycles and the Behaviour of Small Manufacturing Firms”. National Bureau of Economic Research, Cambridge, No. WP 3892.
  13. S. D. Oliner and G. D. Rudebusch (1995) “Is There a Bank Lending Channel for Monetary Policy?" Economic Review, Federal Reserve Bank of San Francisco, No. 2, pp.3-20.
  14. Sanusi, J. O. (2002) “Central Bank and the macroeconomic environment in Nigeria”. No. 24 of the national Institute for Policy and Strategic Studies (NIPSS), Kuru on 19 th August.
  15. Adefeso, H. and Mobolaji, H. (2010) ‘The fiscal- monetary policy and economic growth in Nigeria: further empirical evidence’, Pakistan Journal of Social Sciences, Vol. 7(2) Pp 142
  16. Batini, N. (2004) ‘Achieving and maintaining price stability in Nigeria’. IMF Working Paper WP/04/97, June.
  17. Thorbecke & Zhang (2008). Monetary Policy Surprises & Interest Rates: Choosing between the Inflation-Revelation & Excess Sensitivity Hypotheses, RIETI Discussion Paper Series.
  18. Shamshad (2006). Perspectives on Pakistan’s Monetary Policy Developments, Address as Chief Guest at the Woodrow Wilson Centre, Washington D.C

Cite this Article: