Central Bank of Nigeria Monetary Policies and Economic Growth in Nigeria (1980-2018)
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This study examined the Central Bank of Nigeria Monetary Policies and Economic Growth in Nigeria 1980-2018. Secondary data was used for the study and it was obtained from the financial statement of the Central Bank of Nigeria for the period 1980-2018. The unit root property of the data was analyzed using the Augmented Dickey Fuller Test and the variables were all stationary at level, that is integrated at order zero I (0) implying that Ordinary Least Squares can be used to estimate the function. The summary statistics shows that the probability value of the Jarque-Bera test statistics is greater than the critical value, implying that the data for the study is normally distributed. The result of the study indicates that Cash Reserve Ratio (CRR) is positively related to the Gross Domestic Product (GDP) and the relationship is statistically significant (p<0.05). There is a positive relationship between interest (INT) and Gross Domestic Product (GDP) but the relationship is not statistically significant (p>0.05). Liquidity ratio was positively related to Gross Domestic Product (GDP) and the relationship is statistically significant (p<0.05). It was concluded that the inability of monetary policies to effectively maximize its policy objective most times is as a result of the shortcomings of the policy instruments used in Nigeria as such limits its contribution to growth even though monetary policies had brought impressive contribution over the years than the fiscal policies. It was recommended among others that for monetary policy to have a desired impact on the real economy, it is essential that changes in the short-term market interest rate should ultimately transform into changes in other interest rates in the economy which then influence the overall level of economic activity and prices.
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