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Effects of Monetary Policy on Sectoral Output Growth in Nigeria (1986 to 2008)

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  • Saibu M. O
  • Nwosa I. P.

Abstract

This study examines the effects of monetary policy on sectoral output growth in Nigeria over the period 1986:1 to 2008:4. The study utilized an Autoregressive Distributed lag (ARDL) model and the findings showed that manufacturing sector is not sensitive to any of the monetary policy variables. In sharp contrast with manufacturing sector, agricultural sector is responsive to changes in interest rate only while service and wholesale/retail economic activities are responsive to exchange rate. Furthermore, interest rate and exchange rate are the major determinants of mining output growth while building/construction sector is more responsive to changes in exchange rate and bank credit. In general exchange rate is the most important and influential monetary policy measure in Nigeria. The study concludes that monetary policy will be more effective if the inherent differences in these sectors are factor in the design of policies in Nigeria.

Suggested Citation

  • Saibu M. O & Nwosa I. P., 2011. "Effects of Monetary Policy on Sectoral Output Growth in Nigeria (1986 to 2008)," Journal of Economics and Behavioral Studies, AMH International, vol. 2(6), pages 245-254, June.
    • Handle: RePEc:rnd:arjebs:v:2:y:2011:i:6:id:2197
    DOI: 10.22610/jebs.v2i6.242
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