THE EFFECTIVENESS OF MONETARY POLICY IN CONTROLLING INFLATION IN NIGERIA

📄 Project Abstract

This paper investigated the effectiveness of monetary policy in controlling inflation in Nigeria using secondary annual data spanning from 1981 to 2019. Money Supply, Treasury bills rate, monetary policy rate and exchange rate were the variables used in the study to check inflation. The paper employed cointegration method to check for the long run relationship between the variables, Augmented Dickey Fuller unit root test to check if the variables are stationary or non-stationary, Granger causality test to know if the variables are uni-directional, bi-directional or have no causal relationship and Ordinary Least Square (OLS) was adopted because of its property of Best Linear Unbiased Estimator. The study commenced with the analysis of testing the variables of interest using Augmented Dickey Fuller (ADF) unit root test and the result indicates that the variables were non-stationary at level but was stationary at first differences. The Johansen co-integration test revealed the existence o...