THE EFFECTIVENESS OF MONETARY POLICY IN CONTROLLING INFLATION IN NIGERIA
This research work was embarked to aid you to study the effectiveness of monetary policy in controlling inflation in Nigeria. The need to the study was informed by the tend inflationary growth over the years and also the impact of the inflation in achievement of the four basic economic growth, price, stability, high level of employment and low inflationary rate for favourable balance of payment. Many research works have been carried out on this issue previously but despite all the good policies of government and its agent, these goals have remained elusive over the years. There was therefore a need for a study on these sensitive issues. For the purpose of this study, data was gathered through the secondary source, which includes money supply, gross domestic product and the inflationary rate for a period.
TABLE OF CONTENT
CHAPTER ONE
Introduction 1
CHAPTER TWO
An overview of Nigerian monetary policy 11
2.1 Administration of monetary policy 13
2.2 Objectives of monetary policy 14
2.3 Instruments of monetary policy 15
2.5 Inflation in Nigeria 18
2.6 Types of inflation 20
2.7 Causes of inflation 21
2.8 Monetary policy as control measure in Nigeria 25
CHAPTER THREE
Research design and methodology 29
3.1 Sources of secondary data 29
3.2 Method of investigation 30
3.3 Sampling procedure 30
CHAPTER FOUR
4.1 Conclusion/recommendation 31
4.2 Recommendation 31
Bibliography 33
CHAPTER ONE
INTRODUCTION
In Nigeria, the central bank which is at the apex of the banking pyramids applies a variety of policy measure and technique with which to control and regulate money and credit in order to attain the desired for necessary to use the package of discussing the efficiency or otherwise of general economic management strategies.
Government policy statement clearly revealed that inflation becomes a problem in Nigeria about early 1970s. The contention can be sustained further by the fact that the economic brogan to experience double digit rate of inflation from the early part of the decade globally, the power of the inflation is not peculiar to Nigeria. But it is general to attain to a higher level of economic development as the period generally lead to inflation spiral in the country.
But whether inflation in Nigeria is due to monetary mismanagement on the part often authorities concerned or caused by inherent structure deficiencies still remain uncertain. Many factors have been identified to be responsible for inflationary pressure in the economy. In a symposium in Nigeria held sometimes ago, most of the participants stressed on money supply net come of government expenditure. Limitation in real output and the influence comported, as the major causes of inflation in Nigeria. In the process of formulating monetary policy it is of paramount.
1.1 STATEMENT OF THE PROBLEM
Many attempts have been made by the Nigerian authorities to attain higher rates generally being accompanied by certain degrees of prices increase in recent into years. The phenomenon developed into several and prolonged inflation and stagflation indeed, it is increasingly being recognized that a process of rapid economic growth is likely to provoke inflationary pressure.
However, whether the problem of inflation in this country is due to mismanagement of monetary policy tools or structural deficiencies still remain a contriver sail mother.
During the last decade, the problem of inflation on reflection to economic growth and development has been extensively discussed. The problem is not peculiar to Nigeria. But was ashamed global phenomenon on. It is generally agreed world wide that inflation is socially unjust. Inflation also effects general economic behaviour and the pattern of resources allocation. By disporting price relations and under mining general confidence, prolonged inflation tends to direct investment away from production sector and this slacker growth.
Furthermore, inflation discourages private savings and encourage speculation among the various economic units.
Another consequence is that it result in balance of payment difficulties and reduce the external having its national economic management strategies largely informed by new classical and Keynesian persuasion, have song over the decades for the analysis recommendation upon the very degree with respect to taxing public. The monetary control policy has non-, thus primary variable. I hereby try to analyze the causes and effect of Nigeria inflation in terms of some qualifiedly variable as: money supply, real output etc.
1.2 RESEARCH QUESTION
The following are the question point to my research.
1.3 DEFINITION OF TERMS
The operational terms are defined to help the reader to have a better knowledge of research .MONETARY POLICY
This is any conscious action undertaken by the monetary authorities to change the volume, availability, quantity, cost and direction of money and credit in a given economy.
It can also be defined as the credit measures adopted by central banks to control the supply of money of which is the objective of achieving the general economic policy.
It consists of action by the government, which are aimed at the achievement of certain set of economic objectives.
This is statement include objective to attain it, many include proportion in the use of means to attain those objectives.
This is just a government policy that concerns revenue and taxation.
This is rise in the general price level of all goods and services.
Condition of general rising in prices caused by increase in aggregate demand expenditure, savings campaign, credit, controls image adjustment and all the conceivable anti-inflationary measure affecting the price which all combined should determine in general level.
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