scholarly journals EFFECT OF MONETARY POLICY ON ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL INVESTIGATION

10.26458/1815 ◽  
2018 ◽  
Vol 18 (1) ◽  
pp. 123-140 ◽  
Author(s):  
Lawrence Olisaemeka UFOEZE ◽  
J. C ODIMGBE ◽  
V. N. EZEABALISI ◽  
Udoka Bernard ALAJEKWU
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Time Series Data ◽  
Series Data ◽  
Long Run ◽  
Effect Of Monetary Policy ◽  
Positive Effect

The study investigated effect of monetary policy on economic growth in Nigeria. The natural log of the GDP was used as the dependent variables against the explanatory monetary policy variables: monetary policy rate, money supply, exchange rate, lending rate and investment. The time series data is the market controlled period covering 1986 to 2016. The study adopted an Ordinary Least Squared technique and also conducted the unit root and co-integration tests. The study showed that long run relationship exists among the variables. Also, the core finding of this study showed that monetary policy rate, interest rate, and investment have insignificant positive effect on economic growth in Nigeria. Money supply however has significant positive effect on growth in Nigeria. Exchange rate has significant negative effect on GDP in Nigeria. Money supply and investment granger cause economic growth, while economic growth causes interest rate in Nigeria. On the overall, monetary policy explain 98% of the changes in economic growth in Nigeria. Thus, the study concluded that monetary policy can be effectively used to control Nigerian economy and thus a veritable tool for price stability and improve output.

scholarly journals An Econometrics Analysis of the Impact Exchange Rate on Economic Growth of Nigeria

2021 ◽  
Vol 4 (3) ◽  
pp. 185-198
Author(s):  
Okosu Napoleon David
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Current Account ◽  
Series Data ◽  
Current Account Balance ◽  
National Account ◽  
Long Run ◽  
The Impact

The study interrogates the impact of exchange rate on the economic growth of Nigeria from 1981 to 2020 using quarterly time-series data from the Central Bank of Nigeria and the World Bank National Account. The dependent variable in the model was Real Gross Domestic Product (RGDP), and the independent variables were Exchange Rate (EXCHR), inflation (INFL), Interest Rate (INTR), Foreign Direct Investment (FDI), Broad Money Supply (M2) and Current Account Balance of Payment (CAB). The methodology employed was the Auto-Regressive Distributed Lag (ARDL) model which incorporates the Cointegration Bond test and Error-Correction Mechanism. The finding indicates that in the short run, EXCHR, CAB, M2 and FDI, had a positive impact on economic growth. The impact of EXCHR and CAB were significant on growth while that of M2 and FDI were insignificant to growth. However, INTR and INFL had a negative impact on economic growth with both variables being statistically significant. The bound test showed that there was a long-run relationship among the study variables, and the results from the long run reveal that the exchange rate has a positive and significant impact on economic growth. Inflation, Interest rate, FDI, Current Account Balance of Payment (CAB) and Broad Money Supply all have a positive and significant impact on economic growth. Based on the findings the study recommended that monetary authority should strictly monitor the operations of banks and other forex dealers with a view of ensuring unethical practices are adequately sanctioned to serve as a deterrent to others.

scholarly journals Analysis of The Effect of Monetary Policy on Government Sharia Securities (SBSN) in Indonesia

2018 ◽  
Vol 2 (2) ◽  
pp. 109
Author(s):  
Juaris Juaris ◽  
Raja Masbar ◽  
Chenny Seftarita
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Time Series Data ◽  
The State ◽  
Series Data ◽  
Positive Contribution ◽  
State Budget ◽  
Effect Of Monetary Policy

Outstanding Government Sharia Securities (SBSN) in Indonesia from the first published on 2008 continued to experience significant growth. Monetary indicators often associated with capital markets are inflation, exchange rate and interest rate (BI Rate) show a fluctuating pattern, these factors can inhibitSBSN growth.This study aims to analyze the effect of monetary policy(inflation, exchange rate and BI Rate) on Government Sharia Securities (SBSN) and the contribution of Government Sharia Securities (SBSN) tothe state budget(APBN). Using monthly time series data from January 2010 until July 2016 and Autoregressive Distributed Lag (ARDL), the estimation results conclude that there is a co-integration in the models studied. While the estimation result of ARDL shows in the long term, exchange rate significantly has an effect on SBSN. While inflation and BI Rate have no significant effect on SBSN either in the short or long term. This study also shows the positive contribution of SBSN as deficit financing and development project. Therefore, the government must optimize the state sukuk by increasing the issuance of state sukuk in the structure of the state budget and supported by the control of inflation and exchange rate. For investors can take advantage of the state sukuk to invest, this is consistent with the insignificant effect of interest rate so that the investment is safe with sharia principles.

scholarly journals Implication of Monetary Policy Rate and Interest Rate on Exchange Rate in Nigeria: 1981-2017

2019 ◽  
pp. 1-11
Author(s):  
Nnamani, Vincent ◽  
Anyanwaokoro, Mike
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Time Series Data ◽  
Unit Root Test ◽  
Series Data ◽  
Statistical Tool ◽  
Long Run ◽  
The Exchange Rate ◽  
The Impact

The study investigated the implication of monetary policy rate on the exchange rate and interest rate in Nigeria, 1981-2017. Because of the above-stated problems, the specific objectives are to: Investigate the effect of monetary policy rate on the exchange rate in Nigeria, determine the effect of the monetary policy rate on interest rate in Nigeria. The analysis of error correction and autoregressive lags fully covers both long-run and short-run relationships of the variable under study. The statistical tool of analysis employed in the study is Autoregressive Distributed Lags (ARDL) and Philips Peron method of stationary testing and structural breakpoint unit root test., these methods were employed to check the stationarity and breakpoint analysis of the time series data employed in this study. The study observed that monetary policy rate has a positive and significant effect on the exchange rate in Nigeria. It was also observed that the monetary policy rate has a positive and significant effect on the interest rate in Nigeria. Overall, our results indicated that the impact of monetary policy on the exchange rate was significant. There was a positive and significant relationship between monetary policy variables and exchange rate. The conclusion that is drawn from our results is that monetary policy remains an effective and potent tool for ensuring a stable exchange rate in Nigeria. The study recommended that monetary policy should be used to create a favourable investment environment by facilitating the emergence of market-based interest rate and exchange rate regimes which could attract domestic and foreign investments. Second; the Central bank of Nigeria (CBN) need to avoid ordination and balance between monetary and fiscal policies to ensure the smooth realization of monetary policy goals. Policy inconsistency or summersault to determine its policy impact before contemplating a change. Finally, there should be a coo.

scholarly journals Monetary Policy Spillovers Through Industrial Growth in Nigeria: A Time Series Analysis

2019 ◽  
Vol 33 (1) ◽  
pp. 94-110 ◽  
Author(s):  
Olatunji A. Shobande
Keyword(s):  
Time Series ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Series Data ◽  
Industrial Output ◽  
Industrial Growth ◽  
Long Run ◽  
Domestic Credit

Abstract The study examines the impact of switching from direct to indirect monetary policy on industrial growth in Nigeria, using the annual time series data sourced from the Central Bank of Nigeria’s (CBN) statistical bulletin between 1960 and 2015. The study adopts the Autoregressive Distributed Lag (ARDL) bound testing approach developed by Pesaran, Shin and Smith (2001) for estimating the relevant relationships. The result of the long-run estimates shows that domestic credit, interest rate and trade balance have positive impact on industrial output while money supply, inflation and exchange rate have negative impact on industrial growth. The result of the short-run dynamics shows that change in the previous (one and second lagged) periods of indirect monetary policy (interest rate, money supply, domestic credit and exchange rate) and industrial output were negatively related to change in industrial output. The error correction term indicates the speed of adjustment of equilibrium to their long-run position, which was found to be negative and significant. The study recommends that policy makers use both conventional and non-conventional monetary policies to speed up industrial output growth and enhance economic recovery by manipulating the macro-economic fundamentals.

scholarly journals DAMPAK KEBIJAKAN INFLATION TARGETING TERHADAP BEBERAPA VARIABEL MAKROEKONOMI DI INDONESIA

2007 ◽  
Vol 9 (1) ◽  
Author(s):  
Yati Nuryati ◽  
Hermanto Siregar ◽  
Anny Ratnawati
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Inflation Targeting ◽  
Time Series Data ◽  
Policy Instrument ◽  
Series Data ◽  
Long Run ◽  
The Exchange Rate ◽  
The Interest Rate

This paper discusses the effects of the inflation targeting framework on a number of macroeconomic variabels in Indonesia, especially after the enactment of Law No. 23/1999. The objectives of the paper are: (1) to describe the independence aspect of the inflation targeting policy; and (2) to highlight the effects of the inflation targeting on a set of main macroeconomic variables.The anaysis uses the Vector Autoregression (VAR) approach, emploting the time series data during the periode of 1998:1 to 2003:6. The main results of this research are: (1) The Central Bank (BI) independence is not yet effective in the implementation of the inflation targeting; (2) the shock on the interest rate affects price level and the exchange rate trivially; and (2) the factors that influence price’s variability are the base money, the interest rate, and the exchange rate. In the long run, a shock to the base money is more important than to the interest rate and to the exchange rate. The study suggests to use base money as the policy instrument of the monetary policy, instead of the short term interest.Keywords: monetary policy, independence, inflation targeting, VARJEL Classification: C32, E31, E52

scholarly journals PENGARUH FAKTOR – FAKTOR EKONOMI TERHADAP INFLASI DI INDONESIA PASCA-KRISIS KEUANGAN

2017 ◽  
Vol 21 (2) ◽  
pp. 73-84
Author(s):  
Jechlien Melinda Reawaruw
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Financial Crisis ◽  
Money Supply ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Negative Effect ◽  
The Government ◽  
Positive Effect

This study aimed to identify the influenceof Interest Rate, Money Supply, and Exchange Rate to inflationin Indonesia after Financial Crisis 2008 with quantitative approach and analyzed using OLS (Ordinary Least Square). Data Methods in this research used time series data in the period 2008:1 until 2015:2. The result of this research indicate that Interest Rate, Money Supply, and Exchange Rate simultaneously effect the inflationin Indonesia after Financial Crisis 2008. Interest Rate has a positive effect 2.755885%, Money Supply has a positive effect 1.28E-06%, and Exchange Rate have a negative effect 0.000841%. Bank Indonesia as an institution that is responsible for determining the inflatin target has a very important role and coordinate with the government in implementing fiscal policy and monetary policy appopriately.

scholarly journals ANALISIS PENGARUH REMITANSI, INVESTASI ASING LANGSUNG, IMPOR DAN PERTUMBUHAN EKONOMI DI INDONESIA

2020 ◽  
Vol 2 (4) ◽  
Author(s):  
Regina Septriani Putri ◽  
Ariusni Ariusni
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Positive Effect

Abstract : This study examined and analysis the effect of remittances, foreigndirect investment, imports, and economic growth in Indonesia in the long run andshort run. This study using Error Correction Model (ECM) method and using theannual time series data from 1989 to 2018. This study found that: (1) remittancehave an insignificant positive effect on economic growth in the long run and shortrun,(2)foreign direct investment have a significant positive impact on economicgrowth in the long run and short run, (3) import have an insignificant positiveimpact on economic growth both in the long run and short run. To increase theeconomic growth in the future, this study suggests the government to decresingimports of consume goods and increasing the inflow of capital goods, rawmaterial goods, remittances and foreign direct investment.Keyword : Remittance, Foreign Direct Investment, Import, Economic Growth andECM

scholarly journals Political Stability and its Impact on Economic Growth of Pakistan (1988-2018): A Time Series Analysis

2020 ◽  
Vol 6 (1) ◽  
pp. 273-282
Author(s):  
Majid Hussain Phul ◽  
Muhammad Saleem Rahpoto ◽  
Ghulam Muhammad Mangnejo
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Data ◽  
Political Stability ◽  
Series Data ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Positive Effect

This research paper empirically investigates the outcome of Political stability on economic growth (EG) of Pakistan for the period of 1988 to 2018. Political stability (PS), gross fixed capital formation (GFCF), total labor force (TLF) and Inflation (INF) are important explanatory variables. Whereas for model selection GDPr is used as the dependent variable. To check the stationary of time series data Augmented Dickey Fuller (ADF) unit root (UR) test has been used,  and whereas to find out the long run relationship among variables, OLS method has been used. The analysis the impact of PS on EG (EG) in the short run, VAR model has been used. The outcomes show that all the variables (PS, GFCF, TLF and INF) have a significantly positive effect on the EG of Pakistan in the long run period. But the effect of PS on GDP is smaller. Further, in this research we are trying to see the short run relationship between GDP and other explanatory variables. The outcomes show that PS does not have such effect on GDP in the short run analysis. While GFCF, TLF and INF have significantly positive effect on GDP of Pakistan in the short run period.

scholarly journals An econometric analysis of the effectiveness of fiscal and monetary policies in India

2021 ◽  
Author(s):  
Anand Nadar
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Money Supply ◽  
Series Data ◽  
Monetary Policies ◽  
Indian Economy ◽  
Long Run ◽  
Short Run ◽  
Bound Test

This study investigatesthe effectiveness of fiscal policy and monetary policy in India. We collected thetime series data for India ranging from 1960 to 2019 from World Development Indicator (WDI). Weapplied the bound test co-integration approach to check the long-run relationship between fiscalpolicy, monetary policy, and economic growth in the context of Indian economy. The short-run andlong-run effects of fiscal policy and monetary policy have been estimated using ARDL models. Theresults showed that there is a long-run relationship between fiscal and monetary policies witheconomic growth. The estimated short-run coefficients indicated that a few immediate short runimpacts of fiscal and monetary policies are insignificant. However, the short-run impacts becomesignificant as time passes. The long-run results suggested that the long-run impact of both fiscal andmonetary policies on economic growth are positive and significant. More specifically, the GDP levelincreases if the money supply and government expenditure increase (Expansionary fiscal andmonetary policies). On the other hand, the GDP level decreasesif the money supply and governmentexpenditure decrease (contractionary fiscal and monetary policies). Therefore, this studyrecommends to use expansionary policies to spur the Indian economy.

scholarly journals IMPACT OF TRADE ON ECONOMIC GROWTH OF PAKISTAN: AN ARDL TO CO-INTEGRATION APPROACH

2016 ◽  
Vol 55 (2) ◽  
pp. 47-58
Author(s):  
Nooreen Mujahid ◽  
Azeema Begum ◽  
Muhammad Noman
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Exchange Rate ◽  
Time Series Data ◽  
Policy Option ◽  
Stationary Time Series ◽  
Series Data ◽  
Long Run ◽  
Import And Export ◽  
The Relationship

This paper explores the relationship between export growth and economic growth in the case of Pakistan by employing time series data for the period 1971- 2013. This study has incorporated variables like GDP (Gross Domestic Product) exports, imports and Foreign Direct Investment (FDI). We have applied ARDL to co-integration and Error Correction Model (ECM). The study provides the evidence of stationary time series variables, the existence of the long - run relationship between them, and the result of ECM revealed short rum equilibrium adjustment. Pakistan has many options for enhancing the export of the country. There is a dire need to minimize trade barriers and restrictions such as import and export quotas. Government of Pakistan had introduced Structural Reforms for liberalization, privatization and de-regulation which will actually shifted the trend of trade at a significant level in the end of 1980s. Low levels of interest rate can help exportable industries in which investments are needed to promote and enhance the exports. Stable exchange rate is the first and the best policy option for increasing the export and managing the imports. There is a cause and effect relationship between exchange rate and FDI. Pakistan has to immediately find the policies and processes that support logistics and facilitates trade.

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