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The effectiveness of monetary policy in achieving economic growth: the case of Nigeria, 1980-2009

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  • Omankhanlen Alex Ehimare

    (Department of Banking and Finance Covenant University, Ota, Ogun State,Nigeria)

Abstract

This study investigates the Effectiveness of Monetary policy in achieving Economic Growth: The case of Nigeria for the period 1980-2009. Monetary policy has become a major tool in economic management in Nigeria because of the dominance of the financial sector in its economic activities. This study employed the Ordinary Least square method in carrying out the research. From the various test carried out it was find out that monetary policy rate (MPR) (formerly minimum rediscount rate (MRR)),exchange rate and treasury bill investment have negative impact on GDP. Also it is seen that during the period under review that the manipulation of monetary policy instruments have not proven to be effective in achieving economic growth. It is therefore recommended that the monetary authorities should strengthen the working mechanism of the monetary policy instruments to ensure their success in helping to achieve the desired macroeconomic growth. In addition the policy instrument should be a well coordinated optimal mix of instruments.

Suggested Citation

  • Omankhanlen Alex Ehimare, 2011. "The effectiveness of monetary policy in achieving economic growth: the case of Nigeria, 1980-2009," EuroEconomica, Danubius University of Galati, issue 29, pages 133-146, August.
    • Handle: RePEc:dug:journl:y:2011:i:29:p:133-146
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    References listed on IDEAS

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    1. Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393, Elsevier.
    2. Marvin Goodfriend & Robert G. King, 1997. "The New Neoclassical Synthesis and the Role of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 231-296, National Bureau of Economic Research, Inc.
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