The Relationship Between Policy Rates and Domestic Debt in Ghana (Published)
The principal purpose of this study is to investigate the relationship between policy rates and domestic debt in Ghana. Utilizing a time series data, the study adopted the Vector Error Correction Model (VECM) for result analysis. Over the long run, domestic debt was found to have a negative impact on monetary policy rate, with the reverse observed for the short run. However, both models yielded statistically insignificant results. Nevertheless, the study revealed a statistically significant relationship between inflation and real GDP with the monetary policy rate in the long run, indicating a positive and negative impact, respectively. In the short run, only inflation was found to be statistically significant. The study’s findings and analysis were found to be reliable as there was no evidence of serial correlation or heteroskedasticity in the model. In the end, the study was able to address a crucial gap in the literature on public debt by primarily investigating the influence of domestic debt on monetary policy rate in Ghana.
Keywords: Domestic debt, Monetary Policy Rate., vector error correction model
Domestic Debt and the Performance of Nigerian Economy (1990 -2018): Investigating the Nexus (Published)
The study evaluated the relationship between domestic debt and the performance of Nigerian economy;for the period (1990-2018). Secondary data were used and collectedfrom Central Bank of Nigeria Statistical Bulletin. The study used Gross Domestic Product (GDP) and was employed as the dependent variable to measure the performance of the Nigerian economy; whereas, Development Stock, Treasury Bill and Interest rate were also employed as the independent variables.Hypotheses were formulated and tested using time series econometrics Models. The result revealed that the variables do not have unit roots. There is also a long-run equilibrium relationship between domestic debt and Gross Domestic Product. The result confirmed that about 72% short-run adjustment speed from long-run disequilibrium. Domestic debthad a causal relationship with Gross Domestic Product. The coefficient of determination indicated that about 64% of the variations of the performance of Nigerian economy can be explained by changes in domestic debt variables. The study concluded that domestic debt had a causal relationship with performance of the Nigerian economy.Thus, the study recommended that Government and policy makers should maintain a debt bank deposit ratio below 35 percent and resort to increase the tax revenue to finance its projects. Government should divest itself of all projects which the private sector can handle including refining crude oil (petroleum product) and transportation. Government should maintain a proper balance between short term and long term debt instruments in such a way that long term instruments dominate the debt market.
Keywords: Domestic debt, Economics Performance, Investigating the Nexus, Nigeria