THE EFFECTS OF MONEY SUPPLY ON INTESEST RATE IN NIGERIA (1988 – 2010)
THE EFFECTS OF MONEY SUPPLY ON INTESEST RATE IN NIGERIA (1988 – 2010)
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Date
2011-07
Authors
YUNANA, TITUS WUYAH
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Abstract
This thesis work examines the effects of money supply on interest rates in Nigeria from 1988 –
2010, by applying the vector Auto-regression approach. The choice of this period is to enable us
focus strictly on the era of market-based monetary regime in Nigeria. The results confirm a
negative effect of money supply on interest rates. This result relies on the liquidity frame theory.
While, fiscal deficits indicated a positive relation with interest rate. The granger causality
indicated a bilateral relation between money supply and interest rate. It is recommended that for
government to stimulate investment for economic growth, they should reduce interest rate by
expanding money supply. The government should also discouraged unnecessary spending to
bring down interest rate. Moreover, where deficit financing is inevitable, it should be put into
productive activities in order to create more employment opportunities, raise national output,
and increase the living standard of the people
Description
A THESIS SUBMITTED TO THE POST-GRADUATE
SCHOOL, AHMADU BELLO UNIVERSITY, ZARIA IN
PARTIAL FULFILMENT OF THE REQUIREMENT FOR
THE AWARD OF DEGREE OF MASTERS OF SCIENCE
(ECONOMICS)
JULY, 2011
Keywords
EFFECTS,, MONEY SUPPLY,, INTESEST,, RATE,, NIGERIA