ABSTRACT

This study aimed at analyzing through econometric methodology the effects of monetary policy in Nigeria economy. To meet the above objective, output growth was chosen as the dependent variable while real exchange rate, real interest rate and inflation was chosen as the independent variable. The ordinary least square was used in the regression estimation. From the empirical result, we realized that the entire explanatory variables are insignificant in the t-test, but in f-test we rejected the null hypothesis and conclude that the slope coefficient are not simultaneously equal to zero. We realizes from the battery test that there is a co integration between the explanatory band the dependent variables since its level of stationarity are the same.

The policy implication of the result is that if monetary and banking policies are effectively applied, it will be consistent with determining the level of output growth in the economy

TABLE OF CONTENTS

CHAPTER ONE 

1.0   INTRODUCTION

1.1   BACKGROUND OF THE STUDY

1.2   STATEMENT OF PROBLEM  

1.3   AIMS AND OBJECTIVES OF THE STUDY

1.4   SIGNIFICANT OF THE STUDY

1.4.1 HYPOTHESIS / RESEARCH QUESTION

1.5    SCOPE OF THE STUDY 

1.6    LIMITATION OF THE STUDY

1.8    DEFINITION OF TERMS

1.8.1 BANKING INDUSTRY

1.8.2 INSURANCE BANK

1.8.3 BANK DISTRESS

CHAPTER TWO

2.0   LITERATURE REVIEW

2.1   CONCEPTUAL FRAMEWORK

2.2   THEORITICAL LITERATURE

2.2.1 TYPES OF MONETARY POLICY 

2.2.2 AIMS AND OBJECTIVES OF MONETARY POLICY

2.2.3 INSTRUMENTS OF MONETARY POLICY

2.2.4 FISCAL POLICY

2.3    EMPIRICAL LITERATURE

2.3.1 MONETARY POLICY STRATEGY IN NIGERIA

CHAPTER THREE

3.1    THE MODEL

3.2.   BATTERY TEST

3.3    MODEL SPECIFICATION

3.4    METHOD OF ESTIMATION

3.4.1 CO-EFFICIENCE OF MULTIPLE DETERMINATION (R2)

3.4.2 T-TEST

3.4.4 STANDARD ERROR TEST

3.4.5 TEST FOR MULTICOLLINEARITY

3.4.6 HETEROSKEDASTICITY

3.5    SOURCES OF DATA

CHAPTER FOUR

4.1    BATTERY TEST

4.1.1 UNIT ROOT TEST

4.1.2 JOHAMSON CO-INTEGRATION

4.2    PRESENTATION OF REGRESSION RESULT

4.2.1 EVALUATION OF RESULT

4.2.2 EXPECTED AND OBTAINED SIGN OF OUR PARAMETER ESTIMATE

4.3    EVALUATION OF STATISTICAL CRITERIA 

4.3.1 TEST OF SIGNIFICANCE OF THE PARAMETER 

4.3.2  F-test Statistics

CHAPTER FIVE

SUMMARY, CONCLUSION AND POLICY RECOMMENDATION

5.1   SUMMARY

5.2   CONCLUSION

5.3   POLICY RECOMMENDATION  

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