ASSESSING THE ROLE OF MONETARY POLICY ON INFLATION IN NIGERIA

ASSESSING THE ROLE OF MONETARY POLICY ON INFLATION IN NIGERIA

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ASSESSING THE ROLE OF MONETARY POLICY ON INFLATION IN NIGERIA



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ABSTRACT
This research assess the role of monetary policy on inflation in Nigeria. This study focused extensively on the trends inflation and monetary variables in Nigeria from 1996 to 2016.
The use of ordinary least square was adopted to estimate the coefficient using an observation of twenty years. Secondary data was used for the estimation and was source from Central Bank Statistical Bulletin of 2017 volume
Results indicates that exchange rate has negative and significant effect on Nigerian inflation rate, treasury bill rate has positive but insignificant effect on Nigerian inflation rate, monetary policy rate impact positively and significantly on Nigerian inflation rate and it was discovered that broad money supply impact positively but insignificantly on Nigerian inflation rate.
The problems of inflation are undoubtedly surmountable if only the constituted authorities would demonstrate their dexterity in implementations of the necessary policies to curb the menace and since one of the components that are relatively under the control of the monetary authority in Nigeria is the nominal effective exchange rate, efforts must be made to ensure exchange rate stability in order to stem inflationary tendencies.

TABLE OF CONTENT
CHAPTER ONE: Introduction
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Research Questions
1.4 Objective of the Study
1.5 Statement of Hypothesis
1.6 Sources of Data and Basic Methodology
1.7 Significance of the Study
1.8 Scope of the Study
1.9 Plan of Study
CHAPTER TWO: Literature Review and Theoretical Framework
2.1 Conceptual Literature
2.1.1 The Concept of Monetary Policy
2.1.2 Monetary Policy Tools and Techniques
2.1.3 Monetary Policy Rate
2.1.4 Rate of Inflation
2.2 Theoretical Literature
2.2.1 Quantity Theory of Money (Sir Irving Fisher, 1911)
2.2.2 Demand-Pull Theory of Inflation
2.2.3 Cost Push Theory of Inflation
2.2.4 Structural Inflation Theory
2.3 Empirical Literature
2.3.1 Monetary Policy and Inflation: Evidence from Developed Countries
2.3.2 Evidence from Emerging and Developing Countries
2.3.3 Evidence from Nigeria
2.4 Gaps in Literature
CHAPTER THREE: Research Methodology
3.1 Research Design
3.2 Source of Data
3.4 Model Specification
3.5 A Priori Expectations
3.6 Method of Data Analysis
3.7 Criteria for Decision Making
CHAPTER FOUR: Data Analysis and Interpretation of Result
4.1 Trend of Inflation and Monetary Variables in Nigeria from 1996 to 2016
4.1.1 Trend of Exchange Rate in Nigeria from 1996 to 2016
4.1.2 Trend of Broad Money Supply in Nigeria from 1996 to 2016
4.1.3 Trend of Treasury Bill in Nigeria from 1996 to 2016
4.1.4 Trend of Monetary Policy Rate in Nigeria from 1996 to 2016
4.2 Unit Root Test
4.3 Effect of Monetary Policy Variables on Inflation in Nigeria
4.4 Test of Hypothesis
4.5 General Discussion
CHAPTER FIVE: Summary, Conclusion and Recommendations
5.1 Summary
5.2 Conclusion
5.3 Recommendations
References
Appendix

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