Monetary policy and economic growth in Nigeria: Evidence from bounds and Bayer-Hanck cointegration techniques
This paper contributes to the monetary policy-economic growth debate by investigating whether monetary policy stimulates economic growth in Nigeria. Using time series data from 1970 to 2018 and deploying the autoregressive distributed lag (ARDL) model, bounds and the Bayer- Hanck (2013)...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, Belgrade
2023-01-01
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| Series: | Ekonomski Anali |
| Subjects: | |
| Online Access: | https://doiserbia.nb.rs/img/doi/0013-3264/2023/0013-32642336081I.pdf |
| Summary: | This paper contributes to the monetary policy-economic growth debate by
investigating whether monetary policy stimulates economic growth in Nigeria.
Using time series data from 1970 to 2018 and deploying the autoregressive
distributed lag (ARDL) model, bounds and the Bayer- Hanck (2013)
cointegration tests, evidence from the main and robustness checks show that
(1) a significant long-run association exists, and (2) a percentage increase
in the monetary policy rate results in 0.055 percentage decline in economic
growth, on average, ceteris paribus. In other words, these findings confirm
that a statistically significant inverse relation exists between monetary
policy and economic growth in Nigeria. Trade openness also exerts asymmetric
contemporaneous (0.094) and lag (-0.059) impacts on economic growth at the
1% and 5% significance levels, respectively. Similarly, the inflation rate
contemporaneously reduces economic growth (-0.002) at the 1% significance
level while its lag impacts are asymmetric and statistically significant at
the 10% and 5% levels, respectively. Policy recommendations are discussed. |
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| ISSN: | 0013-3264 1820-7375 |