The Effects of Money Supply on Interest Rate in Nigeria (1988 – 2010)

Description

Download The Effects of Money Supply on Interest Rate in Nigeria (1988 – 2010). Economics students who are writing their projects can get this material to aid their research work.

Abstract

This thesis work examines the effects of money supply on interest rates in Nigeria from 1988 – 2010, by applying the vector Auto-regression approach. The choice of this period is to enable us focus strictly on the era of market-based monetary regime in Nigeria.

The results confirm a negative effect of money supply on interest rates. This result relies on the liquidity frame theory. While, fiscal deficits indicated a positive relation with interest rate.

The granger causality indicated a bilateral relation between money supply and interest rate. It is recommended that for government to stimulate investment for economic growth, they should reduce interest rate by expanding money supply.

The government should also discourage unnecessary spending to bring down interest rate. Moreover, where deficit financing is inevitable, it should be put into productive activities in order to create more employment opportunities, raise national output, and increase the living standard of the people. 

Introduction

The ultimate effect of money on the real economy has always been of great concern to economists and monetary policymakers.

The Classical and New Classical Economics, namely the traditional approach proposes that money supply has no significant effect on interest rates.

This approach completely relies on The Quantity Theory of Money and assumes a dichotomy between monetary and real sectors, known as classical dichotomy.

Its main hypothesis is that the real money demand of people is fixed, so that there is a direct relation between money supply (Ms) and price level (P). (Mishkin-1989). A change in money supply induces price level to change through the same direction and by the same proportion.

The traditional approach hypothesizes that the interest rate is determined in the real sector by investment demands and loanable funds.

How to Download this Project Material

First, note that we are one of the best and most reliable online platforms because we don’t retain any of your personal information or data as regards making payments online.

PRICE: ₦3,500 ₦3,000  (Three Thousand Naira Only)

Make a bank deposit or mobile transfer of ₦2,000 only to the account given below;

---

Bank Name: UBA
Account Number: 1022564031
Account Name: TMLT PRO SERVICES

---

After making the payment, CLICK HERE to send the following on WhatsApp;

• Depositor’s Name or Screenshot of Payment
• Name of the Past Question
• Active Email Address

---

or Call Us On +2348082284439

Once your details have been received and your payment confirmed by us, you will receive the past question in your email or WhatsApp within 5 Minutes.

Guarantee of Getting the Material 

We understand that due to the high rate of fraud, many people are afraid of making purchases online but be rest assured that PastExamQuestions will deliver your material after payment.

Once your details have been received and your payment confirmed by us, you will receive the past question in your email or WhatsApp.

Give us Feedback

Have we been able to satisfy you? How well do you think the material will be helpful after having gone through it? Does the price worth the material? Let’s hear from you!

We recommend that our customers give feedback at the end of every transaction to enable us to serve better. You can do this by clicking the review button on this page.

Where is the review button? >> Just scroll up to where you see reviews