CBN Monetary Policy and Inflation Nexus in Nigeria: An empirical approach (Published)
The study explored monetary policy effect on inflation stabilization in Nigeria. Increasing levels of indebtedness may have reduced the fiscal space for fiscal policy intervention and this leaves monetary policy as the real tool of choice for macroeconomic stabilisation. The question we need to ask then is, how effective is this tool of choice? Monthly time series data from 2009-2018 were used in estimating the model. The ADF test for the stationarity, the johansen cointegration test and the vector error correction model were utilized in testing the variables. The findings from the unit root test did indicate stationarity at first difference 1(1). The cointegration (Johansen) test indicates that there was a nexus linking inflation and all the regressors adopted in the long term. The result of the VECM for the two estimated models shows a self-equilibrating mechanism of 14 per cent and 32 per cent for the first and second models respectively. The findings further reveal that the variables; liquidity ratio, policy rate (MPR), exchange rate, reserve requirement and treasury bills rate all had an effective impact on the inflation rate and that that effect was very significant. Hence, the CBN’s monetary policy shocks do seem to have the expected traction on the Nigerian economy. The results make it pertinent for the CBN to utilize all the policy measures adopted in order to keep inflation within acceptable thresholds and prepare to keep inflation within the targeted range of 6-9 per cent, no matter the anticipated or unanticipated strong head winds.
Keywords: ADF, CBN, Cointegration, Monetary Policy, Unit Root, VECM
The Impact of Money Supply on Inflation in Nigeria (1980 – 2009) (Published)
This study examined the impact of money supply on inflation in Nigeria between 1980 and 2009, using Vector Error Correction Mode (VECM). The data for the variables were sourced from CBN statistical Bulletin. The results of the test established a significant long run positive relationship between money supply and inflation in Nigeria. Based on this finding, the study recommended that, government intensify the effort to combat inflation by encouraging the monetary authority to put in place policies measures that are gear toward reducing the volume of money in circulation in Nigeria.
Keywords: Inflation, Money Supply, Nigeria, VECM
Carbon Emission and Economic Growth of SAARC Countries: A Vector Autoregressive (VAR) Analysis (Review Completed - Accepted)
This paper examines the causal relationship between carbon ( ) emissions and economic growth in seven SAARC countries using time series data for the period from 1972-2012. We applied Vector Error Correction Modeling (VECM) approach. We have also applied Augmented Dickey-Fuller (ADF) and Phillips-Perron (P.P) test and Johansen’s cointegration approach to check time series properties and cointegration relationship of the variables. Results exhibit a cointegration relationship between environmental pollution and economic growth. Results also show that the estimated coefficients of emissions have positive and significant impacts on GDP in the long run. These results will help the environmental authorities to understand the effects of economic growth on environment for degradation and manage the environmental problems using macroeconomic methods.