Monetary Policy Transmission and Industrial Sector Growth: Empirical Evidence From Nigeria:
13 Apr 2018-SAGE Open (SAGE PublicationsSage CA: Los Angeles, CA)-Vol. 8, Iss: 2, pp 215824401876936
TL;DR: In this paper, the authors assess the industry effects of monetary policy transmission channels in Nigeria within the period 1981-2014, using the Johans... techniques of analysis employed in the study.
Abstract: The goal of this study is to assess the industry effects of monetary policy transmission channels in Nigeria within the period 1981-2014. Techniques of analysis employed in the study are the Johans...
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TL;DR: In this article , the authors explored the nexus tourism-led sustainable human capital development (HCD) in Brazil, Russia, India, China, and South Africa (BRICS) for the period 1984-2019.
Abstract: The motivation of the study is to explore the nexus tourism-led sustainable human capital development (HCD) in Brazil, Russia, India, China, and South Africa (BRICS) for the period 1984–2019. The study applied several econometrical techniques for exposing the empirical association between tourism and HCD, such as the conventional and structural break unit root test, the combined cointegration test, long-run and short-run coefficients detected through implementing the Augmented Autoregressive Distributed Lagged (AARDL), and directional causality by following Toda-Yamamoto with Fourier function. The unit-roots test established variables are integrated in mixed order, wherein variables are stationary at a level or after the first difference. The estimated test statistics from the combined cointegration test and AARDL confirmed the long-run association between tourism, gross capital formation, financial development, and HCD. Tourism revealed a positive and statistically significant tie with HCD in the long run. Moreover, the joint effects of interactive terms TOR*GCF and TOR*FD (TOR, GCF, and FD denoting tourism development, gross capital formation, and financial development, respectively) established a positive and statistically significant relationship with HCD. In addition, the causality test revealed the feedback hypothesis available between tourism and HCD in all sample countries except India. In conclusion, the role of tourism development is critically important for sustainable HCD in BRICS. Therefore, in case of a policymaking concern, it is inevitable to address the tourism issues with care for capitalizing on the benefits for tourism development.
18 citations
TL;DR: In this paper, the authors examined the relationship between monetary policy and economic growth in Nigeria using time series data covering the period of 1980 to 2017, and found that money supply has positive effect, while both exchange rate and interest rate have negative effect on the real GDP.
Abstract: While there are numerous studies on the relationship between monetary policy and economic growth, evaluating the policy nexus between the two phenomena remain inconclusive. Undeniably, monetary policy is believe to influence the employment level, price stability, growth of aggregate output and equilibrium in the balance of payment- for the case of developing economies. But the magnitude of its influence largely depends on how it is conducted through various channels and the independency of the apex bank to select the appropriate instruments for formulating the monetary policy. In lieu of that, this study examines the relationship between monetary policy and economic growth in Nigeria using time series data covering the period of 1980 to 2017. The study employs the Cointegration test and the Ordinary Least Square (OLS) technique with the view to estimating the model coefficients and showcase the policy nexus between the variables. Result indicates the existence of long-run relationship between monetary policy indicators and economic growth. Further empirical findings show that money supply has positive effect, while both exchange rate and interest rate have negative effect on the real GDP. As such, monetary authorities in Nigeria should adequately managed and monitored the growth level of money supply in order to realise the desired growth level. Given the socio-economic and political conditions in Nigeria, there is growing needs to formulate appropriate monetary measures which might encourage borrowing through sound and productive interest rate as well as stable exchange rate.
7 citations
TL;DR: In this paper, the authors examined the effect of monetary policy on the performance of the manufacturing sector in Nigeria and concluded that monetary policy tools may not be a long run policy instrument for the growth of manufacturing sector output in Nigeria but rather short run instruments.
Abstract: This study examined the effect of monetary policy on the performance of the Manufacturing sector in Nigeria. The explanatory variables are monetary policy rate, Treasury bills rate, Cash reserve requirement and money supply; while the dependent variable is the Manufacturing (MANU) sector output. The study adopted an ex-post facto research design and used secondary data obtained from the CBN Statistical Bulletin. The study covered a period of 32 years (1986 to 2017). The data were subjected to Augmented Dicker Fuller stationarity test to determine the best suitable econometric tool of analyses. The Autoregressive Distributive Lag (ARDL) was used for the model estimation. The results indicate that: monetary policy tools have significant effect on the manufacturing sector output in Nigeria in the short run only. The study thus concludes that monetary policy tools may not be a long run policy instrument for the growth of the manufacturing sector output in Nigeria but rather short run instruments. This study recommended that money supply and treasury bills can be used in the short run as policy instruments to maintain macroeconomic stability in Nigeria with reference to the manufacturing sector.
5 citations
TL;DR: In this paper, the authors investigated the efficacy of monetary policy instruments in Nigeria using monthly data from year 2000 to 2016 and found that Consumer Price Index (CPI), Real Exchange Rate (RER), Money Supply (M2) and Interest Rate (INT) were significant monetary policy indicators that propelled economic growth in Nigeria during the period under review.
Abstract: The inability of monetary policies to efficiently and effectively exploit its policy objective could be a function of the pitfall of policy instruments adopted which seems to restrict its contributions to economic advancement in Nigeria. It is on this premise that this study investigated the efficacy of monetary policy instruments in Nigeria using monthly data from year 2000 to 2016. The study adopted the Johansen Multivariate Cointegration approach and Vector Error Correction (VECM). The Cointegration test established existence of long-term relationship between monetary policy instruments and economic growth. The study also revealed that there was monthly speed of adjustment of the variables towards their long-run equilibrium path to about 27 percent. The key discovery emanated from this study indicated that Consumer Price Index (CPI), Real Exchange Rate (RER), Money Supply (M2) and Interest Rate (INT) were significant monetary policy instruments that propelled economic growth in Nigeria during the period under review. Consequently, the study concluded by recommending Nominal GDP targeting as the framework to be adopted by the monetary authority in Nigeria in their monetary policy making process especially in the face of the new economic paradigm which is expected to be more plausible in improving and sustaining the stated Nigerian macro-economic objectives.
5 citations
Cites background or methods from "Monetary Policy Transmission and In..."
...Ezeaku et al. (2018) assess the effects of monetary policy transmission channels on industrial growth in Nigeria within the period 1981-2014. The study adopted Johansen cointegration and the error correction model (ECM). The results reveal that the private sector credit, interest rate, and exchange rate channels have negative effects on real output growth, both in the long run and in the short run. The outcomes further show that, relatively, the degrees of the established effects are higher in the long run than in the short run. The result of the Johansen cointegration also show that, in the Nigerian case, monetary policy transmission channels jointly have a long-run relationship with real output growth of the industrial sector, and disequilibrium in the system is corrected at the speed of 72.2% annually. Ifeakachukwu and Alao (2018) explored the extent to which monetary policy has influenced export diversification in Nigeria for the period 1962 to 2014....
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...Ezeaku et al. (2018) assess the effects of monetary policy transmission channels on industrial growth in Nigeria within the period 1981-2014....
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...The co-integration procedure defines the long-run relationships among series according to Granger (1981); Engle and Granger (1987); (Engle et al....
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...Ezeaku et al. (2018) assess the effects of monetary policy transmission channels on industrial growth in Nigeria within the period 1981-2014. The study adopted Johansen cointegration and the error correction model (ECM). The results reveal that the private sector credit, interest rate, and exchange rate channels have negative effects on real output growth, both in the long run and in the short run. The outcomes further show that, relatively, the degrees of the established effects are higher in the long run than in the short run. The result of the Johansen cointegration also show that, in the Nigerian case, monetary policy transmission channels jointly have a long-run relationship with real output growth of the industrial sector, and disequilibrium in the system is corrected at the speed of 72.2% annually. Ifeakachukwu and Alao (2018) explored the extent to which monetary policy has influenced export diversification in Nigeria for the period 1962 to 2014. The study employed descriptive and ordinary least squares techniques. The descriptive analysis revealed that the diversification exercise in Nigeria can only be expressed as average. The regression estimate showed that monetary policy was insignificant in influencing export diversification in Nigeria. The major lesson from the work shows that monetary policy has not played a fundamental role in enhancing export diversification in Nigeria as expected. Ufoeze (2018) investigated the effect of monetary policy on economic growth in Nigeria with a time series data from 1986 to 2016....
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DOI•
25 Jul 2020
TL;DR: In this article, the impact of CBN's intervention in the private sector as reflected in such interventions impact on the gross domestic product of the country was investigated, which showed that credit to private sector had a positive but insignificant impact on GDP at the 5 and 10 per cent level of significance.
Abstract: Purpose: This paper investigated the impact of the CBN’s intervention in the private sector as reflected in such interventions impact on the gross domestic product of the country.Methodology: The econometric methodology adopted in this study is the error correction methodology (ECM), it tested the short-run dynamics of the estimated model. The long-run test utilized was the Johansson cointegration test on the gross domestic product (GDP) as the dependent variable and inflation, credit to the private sector and the exchange rate as the explanatory variables. The data (secondary) was sourced from the CBN statistical bulletin and the banks websiteFindings: Findings from the study show that credit to the private sector had a positive, but insignificant impact on GDP at the 5 and 10 per cent level of significance. The prime lending rate that was used as a proxy for interest rate showed a negative but insignificant impact as was the exchange rate even at the 10 per cent level of significance. However the inflation rate had a negative, but significant impact on the gross domestic product. The increase in private sector credit administration through the various interventionist programmes of the CBN may not have translated into increased GDP growth for the period under study. Inflation was not moderated as was expected, in line with some previous research findings that were an allusion to the consequence of sub-optimality and the resultant perplexity. The CBN needs to reassess the impact of its numerous interventionist programmes to see how they can have effective traction on the economy as anticipated and adopt essential approach for Nigeria with a post oil economy in view.
3 citations
Cites background from "Monetary Policy Transmission and In..."
...The study by Famoroti and Tipoy (2019) investigated the effect of the monetary authority’s toolkit on GDP for about 14 countries in the ECOWAS sub continent....
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References
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TL;DR: The relationship between co-integration and error correction models, first suggested in Granger (1981), is here extended and used to develop estimation procedures, tests, and empirical examples.
Abstract: The relationship between co-integration and error correction models, first suggested in Granger (1981), is here extended and used to develop estimation procedures, tests, and empirical examples. If each element of a vector of time series x first achieves stationarity after differencing, but a linear combination a'x is already stationary, the time series x are said to be co-integrated with co-integrating vector a. There may be several such co-integrating vectors so that a becomes a matrix. Interpreting a'x,= 0 as a long run equilibrium, co-integration implies that deviations from equilibrium are stationary, with finite variance, even though the series themselves are nonstationary and have infinite variance. The paper presents a representation theorem based on Granger (1983), which connects the moving average, autoregressive, and error correction representations for co-integrated systems. A vector autoregression in differenced variables is incompatible with these representations. Estimation of these models is discussed and a simple but asymptotically efficient two-step estimator is proposed. Testing for co-integration combines the problems of unit root tests and tests with parameters unidentified under the null. Seven statistics are formulated and analyzed. The critical values of these statistics are calculated based on a Monte Carlo simulation. Using these critical values, the power properties of the tests are examined and one test procedure is recommended for application. In a series of examples it is found that consumption and income are co-integrated, wages and prices are not, short and long interest rates are, and nominal GNP is co-integrated with M2, but not M1, M3, or aggregate liquid assets.
27,170 citations
TL;DR: The role of interest rates in the process of economic development is examined through an empirical inquiry into the interest rate saving investment nexus in the Indian economy during the period 1955-95 as discussed by the authors.
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45 citations
TL;DR: In this paper, the authors investigated the long-run interest rate pass-through of the money market rate to the bank lending rate and asymmetric adjustment of the bank's lending rate.
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TL;DR: In this paper, the importance role of two monetary transmission mechanism channels in managing inflation and contributing to economic growth, by employing Structural Vector Autoregression (SVAR) model.
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TL;DR: In Brazil, monetary and fiscal institutions have played a decisive role in the stabilisation of the Brazilian economy since the mid-1990s as discussed by the authors, and the Brazilian experience offers many lessons to be learned, both in the sense of what could be done and what is better avoided.
31 citations