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Thesis Chapters by Taiwo Fadejin

PhD Thesis for Banking and Finance, 2020

ABSTRACT This study examined monetary policy transmission mechanisms and economic developmen... more ABSTRACT
This study examined monetary policy transmission mechanisms and economic development in Nigeria (1960 to 2018) with a view to assessing its effectiveness in achieving specific macroeconomic objectives such as employment, the balance of payment equilibrium, relatively stable general price level etc. The aims of the study were to determine the influence of monetary policy transmission mechanisms on the economic development in Nigeria. This study became necessary at this time when Nigeria is facing major macroeconomic problems such as low employment, price instability, high inflation etc. The monetary policy transmission mechanisms (independent variables) were monetary policy rate, capital stock, money supply, interest rate spread, credit to private sector, remittances inflows, real exchange rate and inflation rate while the economic development (dependent variable) is gross domestic product per capital growth. Time series data from 1960 to 2018 were sourced from World Bank economic Indicators and Central Bank of Nigeria Statistical Bulletin using a purposive sampling technique. The study adopted a combination of ex-post facto research design, longitudinal research design, descriptive research design, causal-effect research design and correlation research design while statistical analysis used include Augmented Dickey Fuller (ADF) unit root test, granger causality test, the ordinary least square multivariate regression method, the generalized method of moment, the Johansen co-integration and the vector error correction mechanisms methods. Findings from this study indicate that capital stock, with a coefficient of (0.13), money supply (0.17), Migrant remittances inflows (6.5) and exchange rate (0.08) showed significant and positive long run relationship with the Nigerian economic development in the period observed while monetary policy rate (0.10) and credit to private sector (0.30) exerted positive but insignificant impacts on economic development in Nigeria. Interest rate (-0.71) is negatively related but significant while inflation rate (-0.03) is negative and insignificantly related to economic development in Nigeria. This study concludes that monetary policy transmission mechanisms have both short and long run relationships with economic development in Nigeria. Therefore, monetary policy transmission mechanisms implementations were effective tools for economic development in Nigeria. It is therefore recommended that both the Ministry of Finance and Central Bank of Nigeria (regulatory authorities) should regularly ensure optimal mix of monetary policy instruments in order to significantly influence economic activities, stimulate investments and consequently improves macro-economic stability in Nigeria. The regulatory authorities in Nigeria should frequently review the monetary policy rate and credit available to investors to ensure favourable investment and business climate in Nigeria. These regulatory authorities should put up effective policies to boost remittances inflows into Nigeria and influencing investments rather than consumption that may be inflation inducing. The findings of this study enriched literature on economic development and monetary policy transmission mechanisms. The dynamic estimation technique in the likeness of Generalized Method of Moment robustly assessed the endogeneity between monetary policy variables and economic development in Nigeria.

Keywords: Gross Domestic Product per Capita, Interest rate, Monetary Policy, Monetary Policy Rate,
Variables of interest.
.

PhD Thesis for Banking and Finance, 2020

ABSTRACT This study examined monetary policy transmission mechanisms and economic developmen... more ABSTRACT
This study examined monetary policy transmission mechanisms and economic development in Nigeria (1960 to 2018) with a view to assessing its effectiveness in achieving specific macroeconomic objectives such as employment, the balance of payment equilibrium, relatively stable general price level etc. The aims of the study were to determine the influence of monetary policy transmission mechanisms on the economic development in Nigeria. This study became necessary at this time when Nigeria is facing major macroeconomic problems such as low employment, price instability, high inflation etc. The monetary policy transmission mechanisms (independent variables) were monetary policy rate, capital stock, money supply, interest rate spread, credit to private sector, remittances inflows, real exchange rate and inflation rate while the economic development (dependent variable) is gross domestic product per capital growth. Time series data from 1960 to 2018 were sourced from World Bank economic Indicators and Central Bank of Nigeria Statistical Bulletin using a purposive sampling technique. The study adopted a combination of ex-post facto research design, longitudinal research design, descriptive research design, causal-effect research design and correlation research design while statistical analysis used include Augmented Dickey Fuller (ADF) unit root test, granger causality test, the ordinary least square multivariate regression method, the generalized method of moment, the Johansen co-integration and the vector error correction mechanisms methods. Findings from this study indicate that capital stock, with a coefficient of (0.13), money supply (0.17), Migrant remittances inflows (6.5) and exchange rate (0.08) showed significant and positive long run relationship with the Nigerian economic development in the period observed while monetary policy rate (0.10) and credit to private sector (0.30) exerted positive but insignificant impacts on economic development in Nigeria. Interest rate (-0.71) is negatively related but significant while inflation rate (-0.03) is negative and insignificantly related to economic development in Nigeria. This study concludes that monetary policy transmission mechanisms have both short and long run relationships with economic development in Nigeria. Therefore, monetary policy transmission mechanisms implementations were effective tools for economic development in Nigeria. It is therefore recommended that both the Ministry of Finance and Central Bank of Nigeria (regulatory authorities) should regularly ensure optimal mix of monetary policy instruments in order to significantly influence economic activities, stimulate investments and consequently improves macro-economic stability in Nigeria. The regulatory authorities in Nigeria should frequently review the monetary policy rate and credit available to investors to ensure favourable investment and business climate in Nigeria. These regulatory authorities should put up effective policies to boost remittances inflows into Nigeria and influencing investments rather than consumption that may be inflation inducing. The findings of this study enriched literature on economic development and monetary policy transmission mechanisms. The dynamic estimation technique in the likeness of Generalized Method of Moment robustly assessed the endogeneity between monetary policy variables and economic development in Nigeria.

Keywords: Gross Domestic Product per Capita, Interest rate, Monetary Policy, Monetary Policy Rate,
Variables of interest.
.