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Inflation Targeting and Economic Growth Nexus in Nigeria: Implications for Monetary Policy

Author

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  • Ngozi C. Ewurum
  • Chris U. Kalu
  • Damian J. Nwankwo

Abstract

The study examined inflation targeting –economic growth nexus in Nigeria, with the aim of imbibing the useful lessons and avoiding the pitfalls from cross-country experiences. The study employed descriptive approach to the study with data sourced from the Central Bank of Nigeria Statistical Bulletin of various issues. Previous study was also consulted to enrich the work. The most salient observations from the study include first: all the countries that adopted inflation targeting recorded a reduced inflation figure and improved economic growth after adopting inflation targeting than before the adoption. Second, Nigeria is absent from the list of countries that have adopted inflation targeting as a monetary policy framework, while South Africa and Ghana are the only countries in Africa that have adopted inflation targeting. Based on the observations some recommendations were made, mostly the need for the monetary authorities in Nigeria to adopt and implement fully the framework considering the harmful and suicidal effect of inflation on economic growth and investment on the economy.

Suggested Citation

  • Ngozi C. Ewurum & Chris U. Kalu & Damian J. Nwankwo, 2017. "Inflation Targeting and Economic Growth Nexus in Nigeria: Implications for Monetary Policy," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(1), pages 12-27, January.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:1:p:12-27
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Mr. Toshitaka Sekine, 2001. "Modeling and Forecasting Inflation in Japan," IMF Working Papers 2001/082, International Monetary Fund.
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    Cited by:

    1. Joseph Ifeolu Falegan & Ebele Amali, 2023. "An Evaluation of the Optimal Inflation Target for Economic Growth in Nigeria," Journal of Social Science Studies, Macrothink Institute, vol. 10(1), pages 1-1, June.
    2. ULOKO Joseph, 2023. "Impact of Monetary Policy on Inflation Targeting in Nigeria (1986 – 2022)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(12), pages 506-520, December.
    3. Mehmet Balcilar & Ojonugwa Usman & Esther Abdul Agbede, 2019. "Revisiting the Exchange Rate Pass‐Through to Inflation in Africa’s Two Largest Economies: Nigeria and South Africa," African Development Review, African Development Bank, vol. 31(2), pages 245-257, June.

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