EFFECT OF MONETARY POLICY ON ECONOMIC GROWTH IN NIGERIA

The study analysed the effect of monetary policy on economic growth in Nigeria (1981 - 2018). The study is significant in that, it helps to know which of the monetary policy instruments is more effective at increasing economic growth in Nigeria. The variables used for analysis are gross domestic product, liquidity ratio, money supply, cash ratio and interest rate. The annual time series data were sourced from Central Bank of Nigeria (CBN) statistical Bulletin and National Bureau of Statistic (NBS). .The technique employed for the estimation of the data was Auto-regressive Distributed Lag (ARDL). Findings from the study indicated that current period of LR showed a positive but significant impact on the economic growth in Nigeria. The current period of MS showed positive and significant impact on economic growth. The current period of CR showed positive and significant impact on economic growth. The study therefore recommends that monetary authorities should proffer efficient monetary policy in a favorable environment which will attract both domestic and foreign investment which will increase economic growth in Nigerian. The Central Bank of Nigeria should make more commercial banks comply with monetary policy instruments in order to encourage increase access to credit from financial institutions