Monetary Policy and Economic Growth in Nigeria

Abstract

The study examines the impact of monetary policy on economic growth in Nigeria between 1985 – 2023. The study employed the Autoregressive Distributed Lag for both short and long run for the analysis on a time series data. The data were sourced from the central bank of Nigeria (CBN) Statistical Bulletin, 2023. The findings suggest that Money supply has a negative and insignificant impact on economic growth in both short-run and long run, Interest rate has negative and statistically significant impact on economic growth in both short-run and long-run, Inflation rate has positive and significant impact on economic growth in both short-run and long-run and Balance of payment has a positive relationship with economic growth with only the long-run being statistically significant. Based on the findings, the study recommends that for the Nigerian stock market to grow at the desired rate, monetary policy particularly the interest rate management should receive considerable attention of relevant authorities in order to influence strongly and positively on the Nigerian Stock market.