scholarly journals Impact of Monetary Policy on Gross Domestic Product (GDP)

2010 ◽  
Author(s):  
Dr. Irfan Hameed
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Domestic Product

scholarly journals Empirical Analysis of Non-Performing Loans and Liquidity of Deposit Money Banks: Nigeria Experience

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Capital Adequacy ◽  
Domestic Product ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Minimum Capital Requirement ◽  
Small Quantum ◽  
Capital Adequacy Ratio ◽  
Loan Growth

Nigerian Deposit Money Banks (DMBs) tend to have suffered the plight of Non-Performing Loans (NPLs) in recent times in no small quantum. Consequently, a large chunk of them have had to increase their loan loss provisions and this may dwindle their liquidity. This study investigates the effect of non-performing loans on liquidity of Deposit Money Banks (DMBs) in Nigeria. A panel regression analysis was performed on a data of 15 quoted DMBs from 2009 to 2019, in order to examine the correlation between the explained variable (banks’ liquidity) and Non-Performing Loans (NPL) while other explanatory variables- Capital Adequacy Ratio (CAR), Bank Size (BS), Loan Growth (LG), Monetary Policy Rate (MPR), Gross Domestic Product (GDP) and Inflation were taken into consideration. Data were extracted from the banks’ yearly financial statements and the World Bank Financial Statistics. Based on the empirical findings, the study found only four variables-Non Performing Loans, Capital Adequacy Ratio, Bank Size and Inflation significantly related at 5% significant level with banks’ liquidity while the other three; Gross Domestic Product, Loan Growth and Monetary Policy Rate were identified as insignificant. The finding also revealed that NPLs has negative effect on banks’ liquidity while CAR, BS and INF showed positive relationship. The study recommends strict compliance of banks with the NPLs tolerable limit set by the Central bank. It also suggests that the CBN take proactive measure to ensure the banks’ compliance with the minimum capital requirement. Keywords: Banks, Financial Institutions, Liquidity, Non-Performing Loans, Performance

scholarly journals Analysis of Macroeconomics Stability Control of ICI Countries (Indonesia, China, India) Based on Transmission of Monetary Policy through Interest Rate Channel

2021 ◽  
Vol 8 (4) ◽  
pp. 226-234
Author(s):  
Annisa Anggreini Siswanto ◽  
Ahmad Albar Tanjung ◽  
Irsad Lubis
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Interest Rates ◽  
Domestic Product ◽  
Economic Stability ◽  
The Interest Rate ◽  
Transmission Of Monetary Policy ◽  
Interest Rate Channel

This study aims to analyze variable control of macroeconomic stability based on monetary policy transmission through interest rate channels in Indonesia, China, India (ICI). Variables used in the interest rate are rill interest rates, consumption, investment, gross domestic product, and inflation. This study used secondary data from 2000 to 2019. The results of the PVECM analysis through the interest rate channel show that the control of economic stability of the ICI country is carried out by investment variables and gross domestic product in the short term, while in the long run it is carried out by consumption, investment and gross domestic product. The results of the IRF analysis are the response stability of all variables is formed in the medium and long term periods. The results of the FEVD analysis show that there are variables that have the greatest contribution in the variable itself either in the short, medium, long term. The results of the interaction analysis of each variable transmission of monetary policy through interest rates can maintain and control the economic stability of the ICI country. Keywords: Interest Rate Channel, Interest Rate, Consumption, Investment, Gross Domestic Product, Inflation.

scholarly journals THE RELATIONSHIP BETWEEN MONETARY POLICY AND PRIVATE SECTOR CREDIT IN SADC COUNTRIES

2021 ◽  
Vol 9 (1) ◽  
pp. 46-54
Author(s):  
Vikela Liso Sithole ◽  
◽  
Tembeka Ndlwana ◽  
Kin Sibanda ◽  
◽  
...  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Sustainable Growth ◽  
Domestic Product ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact ◽  
The Relationship

This paper empirically examined the relationship between monetary policy and private sector credit in the Southern African Development Community (SADC) group of countries using a panel autoregressive distributed lag (ARDL) co-integration technique for the period from 2009 to 2018. The Hausman test result indicated that the null hypothesis of long-run homogeneity cannot be rejected and hence we accept the pooled mean group estimators (PMGE) as a consistent and efficient estimator. The PMGE results showed that credit to the private sector and gross domestic product have a positive and statistically significant long-run impact on money supply. The impact of credit to the private sector on money supply is shown by the results to be statistically significant and positive both in the short and long run. The impact of gross domestic product on money supply was found to be statistically significant positive in the long run while positive but insignificant in the short run. The study recommends policy attention that is directed towards the appetite for accelerated growth, investment, and employment in the SADC region but more importantly with more regard to the establishment of sustained macroeconomic stability as a precondition to sustainable growth and for the creation of monetary union in the region.

scholarly journals Interest Rate Management and the Nigerian Economy (1986 — 2018)

2019 ◽  
pp. 1-15
Author(s):  
Kalu, Uko Kalu ◽  
Anyanwaokoro Mike
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Money Supply ◽  
Significant Relationship ◽  
Domestic Product ◽  
Ex Post ◽  
The Impact ◽  
Bound Test

This study sought to examine the impact of interest rate on the Nigeria’s economy during the pre and post Regulation periods (1986 – 2013). It also investigated the joint influence of Inflation, Investment, Exchange Rate, Money Supply and Monetary Policy Rate individually on the Gross domestic Product which was used a proxy for output as well as the causality between all the factors combined and gross domestic product. Ex post facto method was adopted In order to test the hypothesis, the researcher adopted Augmented Dickey Fuller, ARDL, Bound Test and Error Correction Model. The result showed that no significant relationship exists between Gross Domestic Product and Investment, Exchange Rate and Money Supply while still affirming that a significant relationship exist between Gross Domestic Product, Monetary Policy Rate and inflation. The eye of the authorities should be on Inflation at all times, Prudent management of our Oil earnings, adequate savings (Foreign Reserve) and investments as these will help stabilize the fluctuating exchange rate  with its consequent influence on interest rate and economic growth.

scholarly journals The role of monetary policy in the formation of fixed capital in the industrial sector and its impact on gross domestic product in Iraq during the period (1990- 2017): دور السياسة النقدية في تكوين رأس المال الثابت في القطاع الصناعي وأثره على الناتج المحلي الإجمالي في العراق خلال المدة (1990- 2017)

2020 ◽  
Vol 4 (10) ◽  
Author(s):  
Monem Hussain Ali, Mohsen Owaid Farhan
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Random Variable ◽  
Industrial Sector ◽  
Capital Formation ◽  
Fixed Capital ◽  
Domestic Product ◽  
Fixed Capital Formation ◽  
The Impact

The research aims to activate the role of some variables of monetary policy in influencing the gross domestic product in Iraq, through its impact on the total fixed capital formation of the industrial sector, as the study includes two models: the first is the effect of monetary variables on the total fixed capital formation of the industrial sector, and the second Measuring the extent of the impact of the total fixed capital formation of the industrial sector on the gross domestic product, as the results of the standard analysis showed that monetary policy variables have a significant effect on the gross domestic product indirectly through their impact on the total fixed capital formation of the domestic sector Industrial, through the value of (R2 = 0.98 and R2 = 0.97 respectively) in the two models, which means that (98% and 97%) of the changes in the dependent variable are due to the independent variables included in the two models, respectively, as well as the value of (F = 85.00360) And (F=207.7157) for the two models, respectively, at the level of significance of 5% and the probability value (Prob 0.000) to the presence of a common integration between the variables included in the two models, which means a long- term balance relationship, as indicated by the value of (DW = 2.668733) and (DW = 2.345350) for the two models. Respectively, there is no problem of self - correlation of the values ​​of the random variable, and this means that monetary policy affects the gross domestic product of Through the use of cash channels to influence the productive sectors in the industrial sector, which in turn affects the total fixed capital formation of the industrial sector that leads to an increase in the level of economic activity in Iraq.

MACROECONOMIC MODELS

2018 ◽  
Author(s):  
Vjacheslav Ishunov ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Causal Relationship ◽  
Domestic Product ◽  
Macroeconomic Model ◽  
Macroeconomic Models ◽  
Government Influence

With the transition to a system of secondary monetary standards, monetary policy turns into one of the main levers of government influence on the economy. At the macroeconomic level, there is a certain causal relationship between the amount of nominal money and the value of the gross domestic product (GDP) produced. To detect this relationship, you will need tools such as the structure of GDP, a formula for calculating the amount of money in circulation, and a macroeconomic model.

scholarly journals Effect of Monetary Policy on Industrial Growth in Nigeria

2021 ◽  
Vol 4 (1) ◽  
pp. 47-60
Author(s):  
Uju E.A. ◽  
Ugochukwu P.O.
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Manufacturing Sector ◽  
Industrial Sector ◽  
Least Square ◽  
Domestic Product ◽  
Open Market ◽  
Industrial Growth ◽  
The Government ◽  
Effect Of Monetary Policy

Monetary policy is one of the regulatory measures of the government to checkmate the money supply in the economy in order to achieve the desired level of prices, employment, output, and boost the industrial sector growth. Industrialization has always constituted a major focus of development strategy and government policy. One of the engines of industrialization is enhancing manufacturing sector capacity; this study adopted manufacturing sector output to examine the effect of monetary policy on industrial growth in Nigeria between 1986 and 2019. Data for the study were collected from the CBN Statistical bulletin, 2019 edition. A multiple regression model was developed and the Ordinary Least Square (OLS) regression technique employed for data analysis. The results showed that Open Market Operation (OMO) measured by Treasury bill rate had positive and significant effect on the Nigerian Manufacturing Domestic Sector Gross Product; Cash Reserve Ratio (CRR) has a positive and significant effect on the Nigerian Manufacturing Sector Gross Domestic Product; and Monetary Policy Rate (MPR) has a negative and significant effect on the Nigerian Manufacturing Sector Gross Domestic Product. The study concludes that monetary policy is a veritable tool for enhancing industrial sector growth in Nigeria. It was recommended that the monetary authority should ensure a lower MPR that can drive up investment and thus boost growth of the industry.

scholarly journals Financial intermediation in deposit money banks and Nigerian economy

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Central Bank ◽  
Significant Relationship ◽  
Financial Intermediation ◽  
Banking System ◽  
Secondary Data ◽  
Bank Credit ◽  
Domestic Product ◽  
Real Sector

The paper summarizes the arguments and counterarguments within the scientific discussion on financial intermediation in deposit money banks and economic growth in Nigeria. The main purpose of the research is to examine the relationship between financial intermediation in deposit money banks and the Nigerian economy. A systematization literary approach for solving the problem is Regression Analysis. Secondary data was sourced from Central Bank of Nigeria Statistical Bulletin. The results of findings within the years of analysis (2000-2017) indicated that there was significant relationship between Total Bank Credit and monetary policy indices on deposit money banks in Nigeria. It was also discovered that there was significant relationship between Gross domestic product and total credit in deposit money banks of Nigeria. Based on the objective and findings of this study, the study therefore recommends that Deposit Money Banks in Nigeria should foster higher level of liquidity in order to increase its ability to cover withdrawals made by its customers and to increase the loan and advances to customers even with the monetary policy indices on deposit money banks. The study also recommends that Deposit Money banks should distribute adequate credit to the real sector for productive purposes in order to increase Gross domestic product. The conclusions that can be drawn from the findings of this study is that with the level of minimum reserve maintained by Deposit Money bank with Central bank of Nigeria, there is adequate availability of credit for real sector investments. High lending rates of deposit money banks may make many customers/investors to consider other sources of finance. Bank Credit/loan is still greatly increasing the production of goods and services in the Nigeria Deposit Money Banking System because of utilisation of the loans by investors.

scholarly journals Determinants of Commercial Banks Credit to the Domestic Economy in Nigeria: Examinations of Dynamics Principles

2018 ◽  
Vol 2 (2) ◽  
pp. 26-41
Author(s):  
Akani, Henry Waleru ◽  
Oparaordu, Beauty
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Commercial Banks ◽  
Inflation Rate ◽  
Public Expenditure ◽  
Negative Impact ◽  
Positive Impact ◽  
Domestic Product ◽  
Treasury Bills ◽  
Macroeconomic Variables

This study examined determinants of commercial banks credit to the domestic economy in Nigeria. The objective was to examine the extent to which banks variables, macroeconomic and monetary policy variables affects credit allocation of Nigerian Commercial Banks. Time series data was sourced from Central Bank of Nigeria Statistical bulletin and financial statement of commercial banks. Percentage of total commercial banks loans to gross domestic product was proxy for dependent variable while the banks specific variables are peroxide by operational efficiency, liquidity, number of commercial banks branches, Commercial Banks Deposit Liabilities and deposit rate. The independent variables in macroeconomic model comprises of real gross domestic product, public expenditure, openness of the economy, inflation rate and exchange rate while monetary policy variables comprises of treasury bills rate, real interest rate, monetary policy rate, growth of money supply and financial sector development. The study employed ordinary least square properties of augmented Dickey Fuller test, co-integration test, and granger causality test and vector error correction model. Findings from the study revealed that; banks specific variables shows that deposit liabilities and liquidity ratio have positive impact on total loans and advances while deposit rate, number of commercial banks branches and openness of the economy have negative impact. Model II found that; exchange rate, inflation rate and Real Gross Domestic Product have positive impact while public expenditure and openness of the economy have negative impact on total commercial bank loans and advances. Model III found that; financial sector development and monetary policy rate have negative impact while growth of money supply, real interest rate and Treasury bills rate have positive impact on total loans and advances of commercial banks. We conclude that monetary policy, bank specific variables or internal variables and macroeconomic variables are strong determinants of Nigerian commercial banks loans and advances. We therefore, recommend for the interplay and the strengthening of macroeconomic variables, monetary policy variables and banks specific variables (internal policies) in order to enhance commercial banks credit in Nigeria.  

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