The Effective and Efficient operation of Money market in Nigeria and its Resultant effects on Economic growth in Nigeria

Akinbola Olawale and Ezeala Obinna
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Akinbola Olawale: Department of Finance, University of Lagos, Lagos, Nigeria.
Ezeala Obinna: Department of Economics, University of Lagos, Lagos, Nigeria.

International Journal of Science and Business, 2023, vol. 26, issue 1, 207-223

Abstract: The optimal performance of the money market is crucial for a nation's economic stability and growth. This research examines the relationship between Nigeria's money market operations and economic growth from 1998 to 2012. Using Ordinary Least Squares (OLS), the study analyzes a dataset with variables including the logarithm of GDP, exchange rates (EXCH), inflation (INF), interest rates (INT), and logarithm of money supply (LOG(MS)). Results offer insights into this connection. Notably, LOG(MS) significantly influences economic growth (T-statistic = 8.829752, p-value = 0.0000), emphasizing the role of a functional money market. Exchange rates (EXCH), inflation (INF), and interest rates (INT) aren't significantly linked to growth, implying other factors at play. A robust model with R-squared at 0.971080 explains much GDP variation, validated by F-statistic of 83.94508, p-value = 0.000000. The study highlights a well-managed money market, especially LOG(MS), driving Nigeria's growth. Policymakers should prioritize effective monetary policy, monitoring money supply, controlling inflation, and aligning market with economic goals.

Keywords: Money Market; Economic Growth; OLS Method; Nigeria; Logarithm of Money Supply; Exchange Rates; Inflation; Interest Rates. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:aif:journl:v:26:y:2023:i:1:p:207-223

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