Monetary Policy and Domestic Private Investment in Nigeria

This paper empirically examined the effect of monetary policy on domestic private investment in Nigeria from 1981 to 2018. In other to achieve our objectives, annual time series data of the dependent variable – domestic private investment (DPI) and independent variables – money supply (MS), government domestic debt (GDD), government domestic savings (GDS), interest rate (INT) and consumer price index (CPI) were collected from secondary sources like CBN Statistical Bulletin and WDI. Thereafter, the data were analyzed using descriptive statistics and the econometrics technique of Vector Error Correction Mechanism (ECM) method of analysis. The results of analysis indicated that a long run relationship exists among the variables. Furthermore, the paper revealed that money supply (MS), government domestic savings (GDS). interest rate (INT) and consumer price index (CPI) have a negative and insignificant effect on domestic private investment in the long run but interest rate is significant at 5%, while government domestic debt (GDD), has a positive and insignificant effect on domestic private investment (DPI) in the long run in Nigeria within the period. Based on the above findings, the paper recommends as follows: Expansionary monetary policy should be formulated that will reduce interest rate, encourage borrowings and savings. This will expand commercial banks and other credit granting financial institutions which will encourage real investment in the economy.

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THE IMPACT OF MONETARY POLICY ON THE ECONOMIC GROWTH OF KUWAIT FOR THE PERIOD OF 1980-2020

Advanced International Journal of Banking, Accounting and Finance ◽

10.35631/aijbaf.39001 ◽

2021 ◽

Vol 3 (9) ◽

pp. 01-14

Author(s):

Nor Asmat Ismail

Keyword(s):

Economic Growth ◽

Monetary Policy ◽

Exchange Rate ◽

Interest Rate ◽

Money Supply ◽

Price Index ◽

Consumer Price Index ◽

Policy Instruments ◽

Real Gdp ◽

The Government

The government of Kuwait has shifted its focus from the dependence on oil and has concentrated on applying a long-term strategic vision that seeks to recover the economy and raise the citizens’ standard of living. To accomplish these objectives, monetary policy should be formulated appropriately by the government. However, it seems that the effects of monetary policy instruments on the economic growth of Kuwait are not obvious. Therefore, the main purpose of this study is to empirically explore the effect of monetary policy on Kuwaiti economic growth. This research uses annual time series data on real GDP, exchange rate, broad money supply (M2), consumer price index, and deposit interest rate over the period (1980 - 2020) and applies Vector Error Correction Model (VECM). The results of the empirical analysis show the presence of a long-run relationship between real Gross Domestic Product and monetary policy instruments. Specifically, it finds that broad money supply (M2), deposit interest rate, and consumer price index affect economic growth positively and statistically significant. While the exchange rate affects real Gross Domestic Product negatively and statistically insignificant. The Granger causality test based on VECM shows two unidirectional causal relationships running from broad money supply and consumer price index to real GDP in the short run. Thus, the study suggests that policymakers concentrate on improving the economy by managing interest rates and maintain supporting environment for sustainable economic growth and development.

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Empirical Study of Relationship between Money Supply and Inflation Based on Data from New Standardised Reporting Format

International Journal of Economics and Finance ◽

10.5539/ijef.v10n1p213 ◽

2017 ◽

Vol 10 (1) ◽

pp. 213 ◽

Cited By ~ 1

Author(s):

Satrugan Sinah

Keyword(s):

Monetary Policy ◽

Money Supply ◽

Price Index ◽

Consumer Price Index ◽

Effective Management ◽

Empirical Estimation ◽

Policy Makers ◽

Monetary Aggregates ◽

Bank Managers ◽

Trade Partner

This study is based on data obtained from the new standardised reporting format introduced by International Monetary Fund. The empirical estimation of relationship between money supply and inflation leads to development of a model, which can be used by policy makers while formulating monetary policy. This model is based on new standardised reporting format, which has a broader approach in terms of capturing monetary aggregates in a country. Thus, as opposed to findings of many earlier studies, which used non-standardised data, this paper shows that an increase in money supply leads to an increase in consumer price index. ly. Finally, the study found that the RGDP of trade partner and bilateral real exchange rate are not statistically significant. empirical evidence linking bank customers’ participation in financial ads to their attitude. Managerially, this study informs bank managers regarding effective management of financial advert contents in order to influence bank customer’s attitude towards financial adverts.

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EFFECT OF MONETARY POLICY ON ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL INVESTIGATION

Annals of Spiru Haret University Economic Series ◽

10.26458/1815 ◽

2018 ◽

Vol 18 (1) ◽

pp. 123-140 ◽

Cited By ~ 1

Author(s):

Lawrence Olisaemeka UFOEZE ◽

J. C ODIMGBE ◽

V. N. EZEABALISI ◽

Udoka Bernard ALAJEKWU

Keyword(s):

Economic Growth ◽

Monetary Policy ◽

Exchange Rate ◽

Interest Rate ◽

Money Supply ◽

Time Series Data ◽

Series Data ◽

Long Run ◽

Effect Of Monetary Policy ◽

Positive Effect

The study investigated effect of monetary policy on economic growth in Nigeria. The natural log of the GDP was used as the dependent variables against the explanatory monetary policy variables: monetary policy rate, money supply, exchange rate, lending rate and investment. The time series data is the market controlled period covering 1986 to 2016. The study adopted an Ordinary Least Squared technique and also conducted the unit root and co-integration tests. The study showed that long run relationship exists among the variables. Also, the core finding of this study showed that monetary policy rate, interest rate, and investment have insignificant positive effect on economic growth in Nigeria. Money supply however has significant positive effect on growth in Nigeria. Exchange rate has significant negative effect on GDP in Nigeria. Money supply and investment granger cause economic growth, while economic growth causes interest rate in Nigeria. On the overall, monetary policy explain 98% of the changes in economic growth in Nigeria. Thus, the study concluded that monetary policy can be effectively used to control Nigerian economy and thus a veritable tool for price stability and improve output.

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MONETARY POLICY AND INFLATION CONTROL: THE CASE OF NIGERIA

European Journal of Management and Marketing Studies ◽

10.46827/ejmms.v6i2.1017 ◽

2021 ◽

Vol 6 (2) ◽

Author(s):

Clement I. Ezeanyeji ◽

Cyril Ogugua Obi ◽

Chika Priscilla Imoagwu ◽

Ugochukwu Frank Ejefobihi

Keyword(s):

Monetary Policy ◽

Exchange Rate ◽

Money Supply ◽

Series Data ◽

Treasury Bill ◽

Insignificant Effect ◽

Long Run ◽

Integration Test ◽

Short Run ◽

The Impact

Inflation is a major problem facing Nigeria as a country today. 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. Thus, this study focuses on the impact of monetary policy on inflation control in Nigeria. The study is based on time series data from 1980 to 2019. The Augmented Dickey Fuller test, Johansen’s co-integration test, the Error Correction model (ECM) estimation was employed in the analysis. The variables include – exchange rate, inflation rate, money supply (% GDP), Treasury bill rate and monetary policy rate. The research findings showed that monetary policy has no significant impact on inflation control in Nigeria both in the short – run and long – run. Money supply has negative and insignificant impact on inflation control in Nigeria both in the short – run and long – run. Again, exchange rate has negative and insignificant effect on inflation control in Nigeria both in the short – run and long – run. The Treasury bill rate has negative but significant effect on inflation control in Nigeria in the short – run, while in the long – run it has positive but insignificant effect on inflation control in Nigeria. The study, therefore, recommends that, Government should provide monetary policies that will preferred efficient provider of favourable environment in terms of the implementation of the appropriate monetary policy rate, exchange rate etc in order to attract both domestic and foreign investment which will create employment opportunities for the Nigerian populace and in turn lead to the expansion of the industries in the country. JEL: E42; E52; E31

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Pengaruh Ekonomi Makro Terhadap Indeks Harga Konsumen

Widya Cipta - Jurnal Sekretari dan Manajemen ◽

10.31294/widyacipta.v3i1.4638 ◽

2019 ◽

Vol 3 (1) ◽

pp. 25-34

Author(s):

Fazhar Sumantri ◽

Umi Latifah

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Central Bank ◽

Money Supply ◽

Significant Relationship ◽

Price Index ◽

Price Level ◽

Consumer Price Index ◽

Index Number ◽

The Republic

Consumer Price Index (CPI) is an index number indicates the price level of commodity and services must be purchase by consumers inone period. The purpose of the research is to analyze macroeconomics impact to CPI on variable Interest Rate of Credit, Money Supply, USD Exchange Rate, and Inflation as variables. Data used in this research was taken from Central Statistics Agency Indonesia and The Central Bank of The Republic of Indonesia. The result from F test shows significant relationship in Interest Rate of Credit, Money Supply, USD Exchange Rate, and Inflation to CPI. Meanwhile t test shows there is no significant relationship between Money Supply and USD Exchange Rate to CPI, while significant relationship Interest Rate of Credit and Inflation to CPI. Based on Adjuted R Square; Interest Rate of Credit, Money Supply, USD Exchange Rate, and Inflation towards to CPI is 65.6% while the rest of it 34.4% was influenced by other factors.

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Monetary Policy Spillovers Through Industrial Growth in Nigeria: A Time Series Analysis

Economics and Business ◽

10.2478/eb-2019-0007 ◽

2019 ◽

Vol 33 (1) ◽

pp. 94-110 ◽

Cited By ~ 1

Author(s):

Olatunji A. Shobande

Keyword(s):

Time Series ◽

Monetary Policy ◽

Exchange Rate ◽

Interest Rate ◽

Money Supply ◽

Series Data ◽

Industrial Output ◽

Industrial Growth ◽

Long Run ◽

Domestic Credit

Abstract The study examines the impact of switching from direct to indirect monetary policy on industrial growth in Nigeria, using the annual time series data sourced from the Central Bank of Nigeria’s (CBN) statistical bulletin between 1960 and 2015. The study adopts the Autoregressive Distributed Lag (ARDL) bound testing approach developed by Pesaran, Shin and Smith (2001) for estimating the relevant relationships. The result of the long-run estimates shows that domestic credit, interest rate and trade balance have positive impact on industrial output while money supply, inflation and exchange rate have negative impact on industrial growth. The result of the short-run dynamics shows that change in the previous (one and second lagged) periods of indirect monetary policy (interest rate, money supply, domestic credit and exchange rate) and industrial output were negatively related to change in industrial output. The error correction term indicates the speed of adjustment of equilibrium to their long-run position, which was found to be negative and significant. The study recommends that policy makers use both conventional and non-conventional monetary policies to speed up industrial output growth and enhance economic recovery by manipulating the macro-economic fundamentals.

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The Effects of Monetary Policy on Agricultural Output in Eswatini

International Journal of Economics and Financial Research ◽

10.32861/ijefr.55.94.99 ◽

2019 ◽

pp. 94-99

Author(s):

Mary S. Mashinini ◽

Sotja G. Dlamini ◽

Daniel V. Dlamini

Keyword(s):

Monetary Policy ◽

Exchange Rate ◽

Interest Rate ◽

Interest Rates ◽

Money Supply ◽

Agricultural Sector ◽

Continuous Production ◽

Annual Data ◽

Agriculture Sector ◽

Long Run

The agricultural sector in Eswatini is viewed as an engine to foster economic growth, reduce poverty and eradicate inequality. The purpose of the study was to investigate the effects of monetary policy on the agriculture Gross Domestic Product (GDP) in Eswatini using annual data for the period starting from 1980 to 2016. Using the Vector Error Correction model (VEC), the empirical results indicated that in the long run, agriculture GDP, exchange rate, interest rate, inflation, broad money supply, and agriculture credit have a negative effect on agriculture GDP in Eswatini. In the short run the study indicated that the variation in agriculture GDP is largely significant caused by the lagged agricultural GDP, interest rate, exchange rate as well as inflation. Money supply and agriculture credit contribute 0.46% and 0.55%, respectively to the variation in agricultural GDP. The study recommends that programs aimed at availing affordable credit to farmers should be prioritized to cushion the agriculture sector against adverse monetary policy shocks in the short to medium term, specifically interest rates, to ensure continuous production.

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Transmission mechanism of monetary policy and response to outside shocks in 2020 by National Bank of the Republic of Kazakhstan

Bulletin of "Turan" University ◽

10.46914/1562-2959-2021-1-1-179-185 ◽

2021 ◽

pp. 179-185

Author(s):

G. G. Ilyassova ◽

Z. N. Abiyeva ◽

G. A. Perneyeva

Keyword(s):

Monetary Policy ◽

Money Supply ◽

Price Index ◽

Consumer Price Index ◽

Base Rate ◽

Transmission Mechanism ◽

Goods And Services ◽

Inflation Forecasts ◽

National Bank ◽

The Republic

The article examines the features and current state of monetary policy and transmission mechanism of the National Bank of Kazakhstan. The transmission mechanism is not a tool to achieve the goals set for the development of the modern economy. This mechanism is a set of interactions in economic processes through which the results of decisions or transactions in the framework of monetary policy affect the economy. In this regard, the article describes the level of inflation and its impact on the level of prices for goods and services. The situation with the use of the consumer price index to calculate inflation, calculated on the basis of the analysis of prices in the portfolio of consumer goods and services of the Ministry of National Economy of the Republic of Kazakhstan, is analyzed in detail. Macroeconomic and microeconomic factors, reflecting the viable direction of the monetary policy of the Republic of Kazakhstan, affect the level of the consumer price index. To make decisions, the NBRK conducts research to determine inflation forecasts. Inflationary expectations make it possible to assess the possible impact on the economy. In this context, the article states that the NBRK's inflation target will be achieved through the following channels (base rate, exchange rate and money supply). The conclusion is based on the fact that, given the global pandemic around the world, one can see the NBRK's expansionary monetary policy and decisions to lower the base rate, increase the money supply and stabilize the currency.

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Money Supply and Economic Activities in Malaysia

International Journal of Management, Finance and Accounting ◽

10.33093/ijomfa.2021.2.2.2 ◽

2021 ◽

Vol 2 (2) ◽

pp. 22-30

Author(s):

Muhamad Lokman Hakimi Suid

Keyword(s):

Interest Rate ◽

Money Supply ◽

Consumer Price Index ◽

Economic Activities ◽

Distributed Lag ◽

Policy Tool ◽

Long Run ◽

Short Run ◽

Keynesian Economic ◽

The Interest Rate

This study examined how economic activities affect the direction of money supply in Malaysia. The overnight policy rate is the interest rate set by Bank Negara Malaysia (BNM) as its monetary policy tool. Based on the Keynesian Economic Theory, the autoregressive distributed lag (ARDL) model was applied to analyse how the industrial production index, interest rate and consumer price index influenced money supply. The findings of this study supported the notion that economic growth significantly affected the money supply in the short run. There was no evidence of such a relationship in the long run. Maintaining a stable money supply is vital to limit adverse variations in economic activity. A stable money supply allows Malaysia to respond effectively during difficult times, especially the current covid19 pandemic.

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Effects of monetary policy on economic growth in Zimbabwe

GIS Business ◽

10.26643/gis.v14i5.9670 ◽

2019 ◽

Vol 14 (5) ◽

pp. 64-95

Author(s):

David Damiyano ◽

Nirmala Dorasamy

Keyword(s):

Monetary Policy ◽

Interest Rate ◽

Money Supply ◽

Relevant Literature ◽

Government Expenditure ◽

Impulse Response Functions ◽

Explanatory Variables ◽

Real Gdp ◽

Long Run ◽

The Impact

This research examines the hypothesis of money neutrality in Zimbabwe. After studying the relevant literature on the effects of changes in money supply on real variables, it outlines the research design for a macro-level study on the impact of changes in money supply on real variables. The hypothesis is that there is a positive relationship between money supply and real variables (GDP). The researcher used real GDP as the dependent variable whilst money supply (M3), interest rate and government expenditure were used as explanatory variables. A VAR model has been applied using the country’s macroeconomic data from 1990 to 2017 which was obtained from ZIMSTATS and World Bank Open Data website. Impulse response functions and variance decomposition were used to analyse the impact of the explanatory variables on real GDP. The results suggest that money positively affects real GDP in the short run but in the long it is insignificant in influencing real output. This means that in Zimbabwe, money is non-neutral in the long run, but it is neutral in the long run. Government expenditure has an insignificant influence on GDP both in the short and long run whilst interest rate has a positive effect on GDP in the long run. The recommendations which were given are that the government; should use expansionary monetary policy to increase real GDP, demonetise the bond note as well as the RTGS and adopting the Rand, curbing inflation through increasing production and ensuring transparency in the manner in which loans are given.

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