Open AccessEffects of Monetary Policy on Sectoral Output Growth in Nigeria (1986 to 2008)
Author(s) -
Saibu M. O
Publication year - 2011
Publication title -
journal of economics and behavioral studies
Language(s) - English
Resource type - Journals
ISSN - 2220-6140
DOI - 10.22610/jebs.v2i6.242
Subject(s) - monetary policy , distributed lag , exchange rate , economics , monetary economics , interest rate , manufacturing sector , credit channel , agriculture , tertiary sector of the economy , macroeconomics , inflation targeting , econometrics , economy , ecology , biology
This study examines the effects of monetary policy on sectoral output growth in Nigeria over the period 1986:1 to 2008:4. The study utilized an Autoregressive Distributed lag (ARDL) model and the findings showed that manufacturing sector is not sensitive to any of the monetary policy variables. In sharp contrast with manufacturing sector, agricultural sector is responsive to changes in interest rate only while service and wholesale/retail economic activities are responsive to exchange rate. Furthermore, interest rate and exchange rate are the major determinants of mining output growth while building/construction sector is more responsive to changes in exchange rate and bank credit. In general exchange rate is the most important and influential monetary policy measure in Nigeria. The study concludes that monetary policy will be more effective if the inherent differences in these sectors are factor in the design of policies in Nigeria.