<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The study examines the impact of switching from direct to indirect monetary policy on industrial growth in Nigeria, using the annual time series data sourced from the Central Bank of Nigeria’s (CBN) statistical bulletin between 1960 and 2015. The study adopts the Autoregressive Distributed Lag (ARDL) bound testing approach developed by Pesaran, Shin and Smith (2001) for estimating the relevant relationships. The result of the long-run estimates shows that domestic credit, interest rate and trade balance have positive impact on industrial output while money supply, inflation and exchange rate have negative impact on industrial growth. The result of the short-run dynamics shows that change in the previous (one and second lagged) periods of indirect monetary policy (interest rate, money supply, domestic credit and exchange rate) and industrial output were negatively related to change in industrial output. The error correction term indicates the speed of adjustment of equilibrium to their long-run position, which was found to be negative and significant. The study recommends that policy makers use both conventional and non-conventional monetary policies to speed up industrial output growth and enhance economic recovery by manipulating the macro-economic fundamentals.</p></abstract>

The study examines the impact of switching from direct to indirect monetary policy on industrial growth in Nigeria, using the annual time series data sourced from the Central Bank of Nigeria’s (CBN) statistical bulletin between 1960 and 2015. The study adopts the Autoregressive Distributed Lag (ARDL) bound testing approach developed by Pesaran, Shin and Smith (2001) for estimating the relevant relationships. The result of the long-run estimates shows that domestic credit, interest rate and trade balance have positive impact on industrial output while money supply, inflation and exchange rate have negative impact on industrial growth. The result of the short-run dynamics shows that change in the previous (one and second lagged) periods of indirect monetary policy (interest rate, money supply, domestic credit and exchange rate) and industrial output were negatively related to change in industrial output. The error correction term indicates the speed of adjustment of equilibrium to their long-run position, which was found to be negative and significant. The study recommends that policy makers use both conventional and non-conventional monetary policies to speed up industrial output growth and enhance economic recovery by manipulating the macro-economic fundamentals.

Monetary Policy Spillovers Through Industrial Growth in Nigeria: A Time Series Analysis

Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The study examines the impact of switching from direct to indirect monetary policy on industrial growth in Nigeria, using the annual time series data sourced...

Monetary Policy Spillovers Through Industrial Growth in Nigeria: A Time Series Analysis

Published Online: May 22, 2019

Page range: 94 - 110

DOI: https://doi.org/10.2478/eb-2019-0007

Keywords
Growth, Industrial, Macroeconomics And Inflation, Monetary Policy

© 2019 Olatunji A. Shobande, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Monetary Policy Spillovers Through Industrial Growth in Nigeria: A Time Series Analysis

Published Online: May 22, 2019

Page range: 94 - 110

DOI: https://doi.org/10.2478/eb-2019-0007

KeywordsGrowth, Industrial, Macroeconomics And Inflation, Monetary Policy

© 2019 Olatunji A. Shobande, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Growth, Industrial, Macroeconomics And Inflation, Monetary Policy