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MONETARY POLICY AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS.
Abstract
This paper examined the impact of monetary policy on economic growth in Nigeria. The Vector Auto-regression Technique (VAR) was used to analyse data between 1980-2017. The result of this paper shows that monetary policy represented by money supply (M2) has a positive impact on economic growth proxy with RGDP. Monetary policy variables-interest rate, money supply, exchange rate and liquidity ratio all had a negative and non significant relationship with inflation. This paper however recommends that the gap between monetary policy formulation and implementation should be bridged so as to ensure the attainment of the set goals, there should be coordination between fiscal and monetary policy measures and that the formal and informal credit sector of the economy so as to prevent counter effect to the monetary policy.
Keywords: Monetary policy, economic growth, Nigeria.