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The Impact Of Money Supply On Economic Growth In Nigeria (1981-2010)
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1.2 STATEMENT OF THE PROBLEM
A study of this nature is always
necessitated by the existence of certain problems. The major problem
that trigged off this work is the recurrence of general price
instability, persistent inflationary pressures and unemployment in the
economy, in spite of the plethora of monetary policy measures adopted
and applied over the years.
There is also this problem of general
feeling that a continuous annual rate of money increases will adversely
increase the rate of price level which will directly lead to inflation,
which may deny the intended effects of use of monetary policy measure to
influence economic growth thus, requiring a policy response. Recently,
these inflationary pressures have succeeded in bringing about
devaluation in Nigeria’s currency value as a result of expansionary
measures of money supply.
From the above issues, this research work will address the following pertinent questions:
a) What is the impact of money supply on economic growth in Nigeria?
b) How can monetary policy be used such that its intended effects of promoting economic growth are assured?
1.3 OBJECTIVE OF THE STUDY
As a result of the problems highlighted above, the researcher desires to achieve the following objectives;
1. To determine the impact of money supply on economic growth in Nigeria.
2.
Recommending ways in which money supply could be used more effectively
in achieving its intended effects of promoting economic growth in
Nigeria.
1.4 HYPOTHESIS OF THE STUDY
The hypothesis is built
around objective 1 because it probes into what can be revealed through
statistical means while objective 2 involves only making
recommendations, this work is interested in testing the hypothesis
below;
Ho: money supply has no impact on economic growth in Nigeria over the years.
H1: money supply has impacts on economic growth in Nigeria over the years.
1.5 SIGNIFICANCE OF THE STUDY
This
research work will help us to investigate into the beneficial effects
of the control of money supply especially its impacts on economic growth
in Nigeria. It will also add to the existing knowledge about the
relationship between money supply and inflation in Nigeria.
It will
equally help students, government, policy makers and corporate bodies in
areas relating to monetary policy, the volume of credit to be supplied
and economic growth stabilization. The implication of this is not
farfetched as research in the field could lead to a proper and more
focused policy formulation, which would yield much better results.
1.6 SCOPE OF THE STUDY
We
rely on the secondary data for this study of which the sources are the
Central bank of Nigeria (CBN) statistical bulletin 2009 and 2010
versions. The research work centers on the impact of money supply on
economic growth in Nigeria from 1981 – 2010, It is expected in course of
this study that the researcher will examine and appraise the stock of
money supply and its impacts with regards to growth in the Nigerian
economy.
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ABSRACT - [ Total Page(s): 1 ]The study examined the impact of money supply on economic growth in Nigeria. In the model specified, real gross domestic product (real GDP) is the regress while broad money supply, real exchange rate, and real interest rate are the regressors. Data was collected from CBN statistical Bulletin for the period 1981 – 2010. The statistical techniques used for the analysis is the ordinary least square techniques with the aid of Stata 10 software package. The research indicates that real interes ... Continue reading---
