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Monetary Policy Transmission Mechanism In Nigeria: An Overview

Author

Listed:
  • Kalu E. Uma

    () (Department of Economics and Development Studies, Federal University, Ndufu-Alike, Ikwo, Ebonyi State)

  • Benson M. Ogbonna

    () (Department of Economics, Abia State University, Uturu, Abia State)

  • Paul Obidike

    () (Department of Accountancy, Management & Entrepreneurial Studies, Federal University Ndufu Alike Ikwo)

Abstract

The paper highlights monetary policy transmission mechanism in Nigeria focusing on empirical studies and happenings in the country that retarded the efficiency of the Central Bank of Nigeria over the years in the pursuant of effective transmission mechanism. The empirical reviews from studies show that interest rate, credit channels and exchange rate are among the channels of monetary policy transmission to the economy. It also highlights some of the problems that imposed a serious debility to effective transmission in Nigeria. The authors made some suggestions for improvement, among which includes: the Central Bank must persevere legally, morally and otherwise to make the economy a cashless one. The low patronage of banking services by many Nigerians is a stumbling block in effective control of money supply and has contributed to incessant inflation in the country; any form of disguise or indirect interference by the government has to be put to an end; and the instruments of monetary policy such as interest rate and exchange that are known to be effective in some sectors should be properly managed and monitored.

Suggested Citation

  • Kalu E. Uma & Benson M. Ogbonna & Paul Obidike, 2014. "Monetary Policy Transmission Mechanism In Nigeria: An Overview," Proceedings of International Academic Conferences 0702180, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:iacpro:0702180
    as

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    File URL: https://iises.net/proceedings/12th-international-academic-conference-prague/table-of-content/detail?cid=7&iid=145&rid=2180
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    References listed on IDEAS

    as
    1. Obstfeld, Maurice & Rogoff, Kenneth, 1995. "Exchange Rate Dynamics Redux," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 624-660, June.
    2. Sanchita Mukherjee & Rina Bhattacharya, 2011. "Inflation Targeting and Monetary Policy Transmission Mechanisms in Emerging Market Economies," IMF Working Papers 11/229, International Monetary Fund.
    3. Norman Loayza & Klaus Schmidt-Hebbel, 2002. "Monetary Policy Functions and Transmission Mechanisms: An Overview," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.), Monetary Policy: Rules and Transmission Mechanisms, edition 1, volume 4, chapter 1, pages 001-020, Central Bank of Chile.
    4. Bernanke, Ben S & Blinder, Alan S, 1992. "The Federal Funds Rate and the Channels of Monetary Transmission," American Economic Review, American Economic Association, vol. 82(4), pages 901-921, September.
    5. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    6. Frederic S. Mishkin, 1995. "Symposium on the Monetary Transmission Mechanism," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 3-10, Fall.
    7. Ismail O. FASANYA & Adegbemi B.O ONAKOYA & Mariam A. AGBOLUAJE, 2013. "Does Monetary Policy Influence Economic Growth in Nigeria?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(5), pages 635-646, May.
    8. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, March.
    9. Stephen G. Cecchetti, 1995. "Distinguishing theories of the monetary transmission mechanism," Proceedings, Federal Reserve Bank of St. Louis, issue May, pages 83-97.
    10. Li, Victor E, 2000. "Household Credit and the Monetary Transmission Mechanism," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(3), pages 335-356, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Mechanism; monetary; overview; policy; transmission;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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