The performance of monetary policy in the nigerian economy (1980-2010)

Thesis Overview

<p> </p><p>1.0 &nbsp;INTRODUCTION</p><p>1.1 &nbsp;BACKGROUND OF THE STUDY</p><p>For most economies, the objectives of monetary policy include price stability, maintenance of balance of payments equilibrium, promotion of employment and output growth, sustainable development. These objectives are necessary for the attainment of internal and external balance, and the promotion of long run economic growth. The importance of price stability derives from the harmful effect of price volatility which undermines the objectives. This is indeed a general consensus that domestic price fluctuations undermines the role of monetary values as a store of value, and frustrate investments and growth.</p><p>Ajayi and Ojo (1981) and fisher (1993), empirical states on inflation, growth and productivity have confirmed the long run inverse relationship between inflation and growth. When decomposed into its components, that is growth due to capital accumulation, productivity growth, and the growth rate of the labour force, the negative association between inflation and growth has been traced to the strong negative relationship between it and capital accumulation as well as productivity growth respectively. The importance of these empirical findings is that stable prices are essential for growth due to capital accumulation, productivity growth, and the growth rate of the labour force, the negative association between inflation and growth has been traced to the strong negative relationship between it and capital accumulation as well as productivity growth.</p> <br><p></p>