MONETARY POLICY AS A TOOL OF ACHIEVING PRICE STABILITY IN THE NIGERIA ECONOMY

ABSTRACT

The subject matter of inquiry is "Monetary Policy as a tool of Achieving Price Stability in the Nigerian Economy". The study therefore examined the influence of money supply Monetary Policy Variable on Consumer Price Index (CPI), the effect of interest rate Monetary Policy Target Variable on domestic private investment and impact of money supply on Gross Domestic Product Proxy for economic growth for the periods 1991 to 2007.

The research design adopted in the study is the Correlation Research Design. Economic application was used for the analysis of relevant relationships and the Ordinary Least Square [OLS] Regression Technique was employed for estimation purposes.

The estimates of relevant functions were appraised on A-Priori theoretical expectation, Statistical and Econometric grounds.

The study suggests that Monetary Policy has significant influence on the direction of aggregate prices in the economy.

Again Monetary Policy has significant nominal impact on economic growth in Nigeria.

However, the study shows Monetary Policy has not influenced investment through interest rate. Incidentally, the bane of Monetary Policy performance through its interest rate channel is due to the huge presence of the government in the money market for fund borrowing.

The study therefore recommends that federal government through the Central Bank of Nigeria evolve appropriate policy to discourage the government (state and otherwise) participation in the money markets as borrower among others.

 


TABLE OF CONTENT

Title Page

Certification

Dedication

Acknowledgement

Abstract

Table of Contents

CHAPTER ONE

 

INTRODUCTION

 

1.1 Background to the study

 

1.2 Statement of problems

 

1.3 Research Question

 

1.4 Objectives of Study

 

1.5 Significant of the study

 

1.6 Scope of the study

 

1.7 Limitations of the study

 

1.8 Definition of terms

 

References

 

CHAPTER TWO

Literature Review

2.1     Conceptual Reviews

2.1.1 Monetary Policy

2.1.2 Price Stability

2.2     History of Monetary Policy in Nigeria

2.2.1 Monetary Policy before 1986

2.2.2 Monetary Policy since 1986

2.3     Objectives of Monetary Policy

2.3.1 Economic Growth

2.3.2 Full Employment

2.3.3 Balance of Payment Equilibrium

2.4     Tools of Monetary Policy

2.4.1 Direct Control

2.4.1.1 Quantitative Ceilings and Bank Credit

2.4.1.2 Administered Interest and Exchange Rates

2.4.1.3 Selective Credit Control

2.4.1.2 Indirect Control/ General Quantitative Control

2.4.2.1 Open Market Operations

2.4.2.2 Discount Rate

2.4.2.3 Moral Suasion

2.4.2.4 Reserve Requirement

2.4.2.5 Special Directives

2.4.2.6 Stabilization Securities

2.4.2.7 Special Deposits

2.5     Recent Developments in Monetary Policy

2.5.1 Target of Monetary Policy

2.5.1.1 Money Supply

2.5.1.2 Bank Credits 2

2.5.1.3 Interest rate

2.5.2 Indicators of Monetary Policy

2.5.3 Lingering problem of Monetary Policy

2.5.4  Challenges of Monetary Policy

2.5.5  Expansion and Contraction of Monetary Policy

2.5.6  Contractionary Monetary Policy or Restrictionary Monetary Policy

2.6     Theoretical Review

2.6.1 The Monetarist View

2.6.2 The Keynesian Views

2.7.1 Empirical Views

2.7.2 Researcher

References

 

CHAPTER THREE

Research Methodology

3.0     Introduction

3.2     Research Design

3.4     Specification of Model

3.5     Estimate Technique

3.6     Evaluation Procedure

3.6.1 A-Priori Theoretical Expectation Critical

3.6.2 Statistical Criteria

 

CHAPTER FOUR

Presentation and Interpretation of Results

4.0     Introduction

4.1     Presentation of Data

4.2     Presentation of Model

4.3     Presentation of Results

4.4     Interpretation of Results

 

 

 

CHAPTER FIVE

Summary Recommendation and Conclusion

5.0     Introduction

5.1     Summary

5.2     Conclusion

5.3     Recommendation

Get the Complete Project