AN INVESTIGATION INTO THE IMPACT OF MONETARY POLICY ON THE ECONOMIC DEVELOPMENT IN NIGERIA
- Project Research
- 1-5 Chapters
- Quantitative
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 5000
-
- Background of the study
- Background of the study
In many cases, monetary management is an essential component of macroeconomic management. Macroeconomic management is typically the responsibility of a state's Monetary Authority or, alternatively, the Central Bank acting on the state's behalf. Monetary policy is therefore a tool for the monetary management of a country. It involves the use of some combinations of instruments by the Central Bank to influence the availability and cost of credit and/or money in the domestic economy with the goal of achieving macroeconomic balance or stability through economic growth. This is accomplished through the utilization of monetary policy instruments (Anyanwu, 2020). On the other hand, the term "macroeconomics policy" refers to the actions taken by government agencies responsible for the conduct of economic policy in order to achieve some desired objective of policy through the manipulation of a set of instrumental variables. This can be seen as a contrast to microeconomics policy, which refers to the actions taken by individuals. Two distinct groups of variables, referred to as "target variables" and "instrumental variables," are distinguished under this paradigm. Target variables are those that the government attempts to achieve desirable values for, and they are the short-term aims of macroeconomic policy (Ezeduji, 2022). Full employment, price stability, a satisfactory pace of economic growth, an equal distribution of income, and balance of payments equilibrium are the primary variables or goods that should be targeted for improvement. On the other hand, instrumental variables are those that the government is able to influence in order to accomplish the economic goals it has set for itself. They must be categorized as exogenous variables because the government must be able to establish their values in isolation from the rest of the variables that make up the system. As a result, macroeconomic policies are concerned with the different activities that policymakers take in order to change the levels of employment, the price level, output, income distribution, and external balance in the appropriate directions through the manipulation of relevant policy instruments (Fisher, 2021). Monetary policy, fiscal policy, exchange rate policy, and income policy are the primary pillars of Nigeria's macroeconomic framework. However, the efficient management of monetary policy is a crucial pre-requisite in order to guarantee adequate liquidation in the banking system and sectoral credit distribution to the vulnerable. This is the most significant point to take away from this. Various parts of the economy, like the power industry, agriculture, the airline industry, small and medium-sized businesses, etc. Because of this, it is clear that the management of monetary policy encompasses more than just maintaining price stability, particularly in emerging countries; rather, it has a dual mandate to maintain both price stability and the sustainability of economic growth. The level of money stock and/or the interest rate can be influenced by monetary policy. This has an effect on the availability, value, and cost of credit, which are all out of sync with the level of economic activity. Bernanke (2021). According to Bernanke (2022) and Blinder, macroeconomic aggregates like output, employment, and prices are in turn affected by the stance of monetary policy through a number of channels. These channels include interest rate or money; credit, wealth or portfolio; and exchange rate channels (2022). This appropriately signifies that the Monetary Authority applies discretionary power to affect the money stock and interest rate in order to make money either more expensive or cheaper depending on the prevalent economic conditions and policy stance that is targeted toward achieving price stability. Bernanke (2022) defines monetary policy as "nothing more than a conscious endeavor to control the money supply and credit conditions for the purpose of accomplishing certain broad economic objectives." This is a simple and accurate explanation of what monetary policy is. In general, the majority of monetary authorities or central banks have been tasked with supporting economic growth, keeping inflation under control, and maintaining a good balance of payments position in order to protect the native currency's value relative to other currencies.
FIND OTHER RELATED TOPICS
Related Project Materials
MAKURDI AIRPORT TERMINAL BUILDING, MARKURDI, BENUE STATE
0 BACKGROUND TO THE PROJECT
The airport terminal is a building at an airport where passengers transfer between ground trans...
The Effectiveness of Corporate Communication in Non-Profit Organizations: A Study of Akwanga Local Government Area, Nasarawa State
Chapter One: Introduction
1.1 Background of the Study
Non-profit organizations (NPOs) rely heavi...
IMPACT OF EARLY CHILDHOOD EDUCATION (ECE) EXPERIENCES ON SCHOOL ENGAGEMENT AND ACADEMIC ACHIEVEMENT OF CHILDREN
Abstract: This research examines the impact of early childhood education (ECE) experiences on subsequent sch...
An investigation of regulatory compliance cost management on bank efficiency: a case study of First Bank of Nigeria
Background of the Study
Regulatory compliance is a mandatory aspect of banking that incurs significant costs, which can aff...
THE NEW TESTAMENT PRINCIPLES OF CHURCH FINANCING IN NIGERIA (A CASE STUDY OF FOUR-SQUARE CHURCH AND CATHOLIC CHURCH)
BACKGROUND OF THE STUDY
Money they say is a spirit and it has principles that govern it, both in church...
The effect of STEM-focused exchange programs on learning outcomes in Zuru LGA, Kebbi State
Background of the Study
STEM-focused exchange programs have gained traction as innovative approaches to enrich students&rs...
Design of a Big Data-Based Career Advisory System for University Students in Bayero University, Kano, Kano State
Background of the Study
The integration of big data technologies in higher education has opened new avenues for personaliz...
CHALLENGES AFFECTING PROCUREMENT PROCESSES IN PUBLIC ORGANIZATIONS IN NIGERIA
Background to the Study
Procurements processes entail various functions move far beyond traditional per...
An investigation of geopolitical causes of income inequality in Soba Local Government Area, Kaduna State
Background of the Study
Soba Local Government Area (LGA) in Kaduna State, like many other parts of northern Nigeria, faces significant chall...
An Evaluation of the Role of Reflective Practice in Developing Nursing Students' Critical Thinking Skills in Federal University, Birnin Kebbi
Background of the Study
Reflective practice is a method of self-assessment and introspection that allows nursing students to critically e...
