Article(s) about Monetary

Abstract: The fact that the 2014-2016 MTEF projects that an increase of N17 trillion in nominal GDP between 2012 and 2016 will be accompanied by a decline in nominal Federal Government revenue and spending suggests that Nigeria’s fiscal policy has disconnected from economic reality. Urgent [Read more]

Uncertain Performance - Just how well is the Nigerian Economy performing? In the absence of a holistic report articulating the economic performance of Nigeria, no one could claim to know. There are only a lot of partial views on different aspects of the economy being expressed by different [Read more]

Abstract - Two puzzles are becoming striking from recent communiqués of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN). First, growth, employment, household and business expenditure issues have completely crept out of policy deliberations, as concerns about fiscal [Read more]

A. What Is Inflation? - Inflation is one of the most frequently used terms in economic discussions, yet the concept is variously misconstrued. There are various schools of thought on inflation, but there is a consensus among economists that inflation is a continuous rise in the prices. Simply put, [Read more]

Monetary policy affects all aspects of our economic and financial decisions-whether to buy a car, build a house, start up a business or to expand the existing one, whether to send one’s child to school or to make the child learn a trade. Monetary policy tries to influence the performance of [Read more]

Fiduciary or paper money is issued by the Central Bank on the basis of computation of estimated demand for cash. Monetary policy guides the Central Bank’s supply of money in order to achieve the objectives of price stability (or low inflation rate), full employment, and growth in aggregate [Read more]

The central bank tries to maintain price stability through controlling the level of money supply. Thus, monetary policy plays a stabilizing role in influencing economic growth through a number of channels. However, the scope of such a role may be limited by the concurrent pursuit of other primary [Read more]

Monetary policy works in part by altering credit flows. The use of legal reserve requirements provide monetary authorities with considerable leverage over the quantity of funds that banks may maintain, just as open market sales reduces the real quantity of deposits banks can issue. This in turn [Read more]

The purpose of monetary policy is to influence the tempo of economic activities in the country. The manner in which this policy affects real economic aggregates such as inflation, output, interest and exchange rates and employment is referred to as transmission mechanism. In theory, monetary policy [Read more]

The mechanism by which monetary policy is transmitted to the real economy remains a central topic in macroeconomics. The bank lending channel represents the credit view of this mechanism. According to this view, monetary policy works by affecting bank assets (loans) as well as banks’ [Read more]