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Nigeria's Transition to Full-Fledged Inflation Targeting: Insights from Ghana’s Monetary Policy Frameworks

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  • Bello Dalhatu

    (Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria)

Abstract

In an effort to provide policy recommendations for Nigeria's transition to full-fledged inflation targeting, this study examines Ghana's monetary policy frameworks (monetary aggregates targeting and inflation targeting) using ARDL bounds test for cointegration and Error Correction Mechanism (ECM) on annual time series data spanning 1965 to 2022 obtained from the Bank of Ghana database and the World Bank database on World Development Indicators. The results demonstrate that monetary aggregates targeting has not been successful in both the short-run and long-run periods in moderating and stabilizing inflation; however, inflation moderated under inflation targeting in both the short run and the long term. This indicates that inflation targeting proves to be a superior monetary policy framework for inflation control.

Suggested Citation

  • Bello Dalhatu, 2024. "Nigeria's Transition to Full-Fledged Inflation Targeting: Insights from Ghana’s Monetary Policy Frameworks," Financial Economics Letters, Anser Press, vol. 3(4), pages 1-12, December.
    • Handle: RePEc:bba:j00007:v:3:y:2024:i:4:p:1-12:d:369
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    References listed on IDEAS

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    1. Rahman, Mohammad Mafizur & Kashem, Mohammad Abul, 2017. "Carbon emissions, energy consumption and industrial growth in Bangladesh: Empirical evidence from ARDL cointegration and Granger causality analysis," Energy Policy, Elsevier, vol. 110(C), pages 600-608.
    2. Mohammed A. Abango & Hadrat Yusif & Adam Issifu, 2019. "Monetary Aggregates Targeting, Inflation Targeting and Inflation Stabilization in Ghana," African Development Review, African Development Bank, vol. 31(4), pages 448-461, December.
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