Kongo Aaron, Ateata Patience, Ote Ola, Odike Abraham Ijuo
{"title":"The Relative Effectiveness of Monetary Policy on Investment in Nigeria","authors":"Kongo Aaron, Ateata Patience, Ote Ola, Odike Abraham Ijuo","doi":"10.56201/ijebm.v9.no4.2023.pg46.59","DOIUrl":null,"url":null,"abstract":"This study investigated the relative effectiveness of monetary policy on investment in Nigeria for the period 1990Q1 to 2019Q4 using SVAR model. The study found out that monetary policy is effective for influencing investment in Nigeria in short run, medium and long run. Specifically, the study found out that interest rate, bank credit and exchange rate are the most ef fective variables for influencing investment when compared with other variables (money supply, inflation and exchange rate) within the model of the study. The study therefore recommend that central bank should peg monetary policy rate at a threshold suitable to increase money supply and credit facilitation by commercial banks in order to stimulate investment in the Nigeria economy.","PeriodicalId":486962,"journal":{"name":"IIARD INTERNATIONAL JOURNAL OF ECONOMICS AND BUSINESS MANAGEMENT","volume":" 74","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"IIARD INTERNATIONAL JOURNAL OF ECONOMICS AND BUSINESS MANAGEMENT","FirstCategoryId":"0","ListUrlMain":"https://doi.org/10.56201/ijebm.v9.no4.2023.pg46.59","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
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Abstract
This study investigated the relative effectiveness of monetary policy on investment in Nigeria for the period 1990Q1 to 2019Q4 using SVAR model. The study found out that monetary policy is effective for influencing investment in Nigeria in short run, medium and long run. Specifically, the study found out that interest rate, bank credit and exchange rate are the most ef fective variables for influencing investment when compared with other variables (money supply, inflation and exchange rate) within the model of the study. The study therefore recommend that central bank should peg monetary policy rate at a threshold suitable to increase money supply and credit facilitation by commercial banks in order to stimulate investment in the Nigeria economy.
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