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The Nigerian economy and monetary policy: Some simple empirics

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  • Omotor, Douglason G.

Abstract

The paper sets out to determine the impact of monetary policy on the Nigerian economy during the post-reform period using annual series data (1986 – 2006). Trend discussion of some basic macroeconomic indicators on the Nigerian economy among others reveal that (a) the Central Bank of Nigeria is instrument independents and not goal independent; and (b) fiscal dominance and policy inconsistencies are some constraints that undermine the efficacy of monetary policy. Results from the simple empirics on monetary policy shocks hold it that monetary policy is not completely impotent in influencing economic activities and particularly that monetary policy shocks affected prices more both in the short-run and long-run than other indicators. This paper posits that monetary policy formulation may concentrate more on the use of Treasury bill as an instrument of inflation-targeting in Nigeria.

Suggested Citation

  • Omotor, Douglason G., 2009. "The Nigerian economy and monetary policy: Some simple empirics," MPRA Paper 22672, University Library of Munich, Germany, revised 07 Jun 2011.
    • Handle: RePEc:pra:mprapa:22672
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    References listed on IDEAS

    as
    1. Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 27-48, Fall.
    2. Bernanke, Ben S & Blinder, Alan S, 1992. "The Federal Funds Rate and the Channels of Monetary Transmission," American Economic Review, American Economic Association, vol. 82(4), pages 901-921, September.
    3. Christina D. Romer & David H. Romer, 1990. "New Evidence on the Monetary Transmission Mechanism," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 149-214.
    4. Stanley Fischer & Julio J. Rotemberg, 1994. "Editorial in "NBER Macroeconomics Annual 1994, Volume 9"," NBER Chapters, in: NBER Macroeconomics Annual 1994, Volume 9, pages 1-8, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy; Reforms; Central Bank; Fiscal dominance; Monetary policy shocks; Nigeria;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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