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Determinants and Stability of Money Demand in Nigeria

Author

Listed:
  • E. Chuke Nwude

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Enugu Campus, Enugu State, Nigeria,)

  • K. Onochie Offor

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Enugu Campus, Enugu State, Nigeria,)

  • Sergius N. Udeh

    (Department of Accountancy and Finance, Godfrey Okoye University, Enugu, Enugu State, Nigeria.)

Abstract

This study examines the determinants of broad money demand and its stability in Nigeria over the quarterly period 1991:Q1 to 2014:Q4. With ordinary least squares and other statistical methods the results indicate that a long-run relationship exists between the real broad money aggregate and real income, domestic interest rate, inflation rate, exchange rate and foreign interest rate. Real income and exchange rate are directly related to the real broad money balances while domestic interest rate, inflation rate and foreign interest rate are inversely related to the demand for broad money.

Suggested Citation

  • E. Chuke Nwude & K. Onochie Offor & Sergius N. Udeh, 2018. "Determinants and Stability of Money Demand in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 340-353.
    • Handle: RePEc:eco:journ1:2018-03-40
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    References listed on IDEAS

    as
    1. Nikolaos Dritsakis, 2011. "Demand for Money in Hungary: An ARDL Approach," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 01-16, November.
    2. Akinlo, A. Enisan, 2006. "The stability of money demand in Nigeria: An autoregressive distributed lag approach," Journal of Policy Modeling, Elsevier, vol. 28(4), pages 445-452, May.
    3. Chaido Dritsaki & Melina Dritsaki, 2012. "The Stability of Money Demand: Some Evidence from Turkey," The IUP Journal of Bank Management, IUP Publications, vol. 0(4), pages 7-28, November.
    4. Mr. Arto Kovanen & Jihad Dagher, 2011. "On the Stability of Money Demand in Ghana: A Bounds Testing Approach," IMF Working Papers 2011/273, International Monetary Fund.
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    Cited by:

    1. Tomader Elhassan, 2021. "Asymmetric Impact of Exchange Rate Fluctuations on Money Demand in Sudan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(5), pages 406-417, May.

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    More about this item

    Keywords

    Broad Money Demand; Autoregressive Distributed Lag; Monetary Policy; Stability; Nigeria;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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