Monetary Policy Dynamics and Output Growth in Nigeria 1980 to 2023

Vollständiger Abstract

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This study investigated the influence of monetary policy dynamics on output growth using the Nigerian economy as the geography of interest. Covering the period 1980 to 2023, the study used monetary policy rate and money supply as proxies for monetary policy and gross domestic product growth rate as measurement for output growth. This study used relevant econometric and analytical technique, particularly the Autoregressive Distributed Lag Model (ARDL) which measures short-run and long-run elasticities simultaneously. Findings arising from the study indicate that monetary policy rate (MPR) and money supply (MS) positively and significantly influenced output growth including inflation which served as the moderating variable. This study makes a significant contribution to the growth and monetary policy nexus especially in a developing economy like Nigeria. It makes a case for a reduction in fiscal dominance given the need to strike a balance between the use of monetary and fiscal policy in pursuit of economic growth.