An Empirical Assessment Of The Central Bank Of Nigeria's (CBN) Policy is Used to Analyze the Factors That Influence Monetary Policy and the Stability Of Nigeria's Economic Growth.
DOI:
https://doi.org/10.70062/globaleconomics.v2i1.193Keywords:
Economic growth, Financial innovation, Monetary policy, Real money demand, Transmission mechanismAbstract
This study examines the impact of the Central Bank of Nigeria's monetary policies on the Nigerian economy, specifically how these policies can be applied to foster economic growth. The research employs multiple regression models as the primary statistical method to analyze the relationship between key variables: money supply, average price levels, interest rates, labor force, and their effects on the Gross Domestic Product (GDP). Using data from 1981 to 2008, the study applies the Ordinary Least Squares (OLS) method to assess these effects comprehensively. The findings indicate that monetary policy, as reflected by money supply, positively influences GDP growth and improves the balance of payments, while also having a negative impact on inflation rates. The study suggests that the Nigerian money market should introduce a broader range of financial instruments to cater to the growing economy’s needs. Additionally, the recommendations emphasize the importance of designing monetary policies that create a favorable investment climate by adjusting interest rates, currency rates, and liquidity management mechanisms. By fostering a well-regulated and flexible monetary system, the Central Bank can further enhance the economic stability and growth of Nigeria, supporting sustainable development in the long term.
References
Abalaka, J. N. (2023). An empirical analysis of the impact of external debt on Nigeria’s economic growth: The nexus on VAR, cointegration, and VECM methodological approach. International Journal of Advanced Research in Statistics, Management and Finance, 10(1), 2315-8409. Retrieved from http://internationalpolicybrief.org/journals/internationalscientificresearchconsortium-journals/intl-jrnl-of-advresearch-in-stats-mgt-and-finance-vol10-no1-january2023
Ajiteru, S. A. R. (2023). An empirical analysis of the impact of external debt on Nigeria’s economic growth: The nexus on VAR, cointegration, and VECM methodological approach. International Journal of Advanced Research in Statistics, Management and Finance, 10(1), 2315-8409. Retrieved from http://internationalpolicybrief.org/journals/internationalscientific-researchconsortium-journals/intl-jrnl-of-advresearch-in-stats-mgt-and-finance-vol10-no1-january-2023
Diamond, R. (2018). Irving Fisher on the international transmission of boom and depression through the money standard. Journal of Money, Credit and Banking, 35, 49.
Folawewo, A., & Osinubi, T. (2016). Monetary policy and macroeconomic instability in Nigeria: A rational expectation approach. Journal of Social Science, 12(2), 93-100.
Friedman, M. (2018). The role of monetary policy. American Economic Review, 58(1), 1-17.
Friedman, M., & Schwartz, A. (2018). Money and business cycles. Review of Economics and Statistics, 32, 32-64.
Gertler, M., & Gilchrist, S. (2021). Monetary policy, business cycles, and the behavior of small manufacturing firms (WP 3892). National Bureau of Economic Research, Cambridge, November.
Keynes, J. (2020). Treatise on money (p. 90). London: Macmillan.
Kogar, C. (2015). Financial innovations and monetary control. The Central Bank of The Republic of Turkey Discussion Paper No: 9515, May.
Modigliani, F. (2018). The monetary mechanism and its interaction with real phenomena. Review of Economics and Statistics, Supplement, 79-107.
Nnanna, O. (2021). The monetary policy framework in Africa: The Nigerian experience. Retrieved from http://www2.resbank.co.za/internet/publication..../Nigeria.pdf
Oliner, S., & Rudebusch, G. (2015). Is there a bank lending channel for monetary policy? Economic Review, Federal Reserve Bank of San Francisco, No. 2, 3-20.
Sulaiman, T. H. (2023). An empirical analysis of the impact of external debt on Nigeria’s economic growth: The nexus on VAR, cointegration, and VECM methodological approach. International Journal of Advanced Research in Statistics, Management and Finance, 10(1), 2315-8409. Retrieved from http://internationalpolicybrief.org/journals/internationalscientific-researchconsortium-journals/intl-jrnl-of-advresearch-in-stats-mgt-and-finance-vol10-no1-january-2023
Tobin, J. (2018). A proposal for international monetary reform. Eastern Economic Journal, 4(3), 153-159.
