Applied Journal of Economics, Management and Social Sciences
This study attempted to investigate the effectiveness of the interest rate channel in the transmi... more This study attempted to investigate the effectiveness of the interest rate channel in the transmission of monetary policy by employing a structural vector autoregressive (SVAR) model using sign restriction. It used a set of policy and non-policy macroeconomic variables based on monthly data spanning the period 2007 and 2020. The structural impulse response functions provided evidence to support the use of the MPR as a signaling rate for domestic interest rates but was, however, found to be ineffective in stabilizing prices or increasing output. Furthermore, results from the variance decomposition of the non-policy variables found the effect of exchange rate innovations to be more significant in explaining variations in the price level. The study, therefore, concludes that the effectiveness of the policy rate in stabilizing prices is dampened by shocks prevalent from the external sector. Given the importance of international trade, the study recommends aggressive exchange rate manage...
The Nigeria Inter-Bank and Monetary Policy Rates Nexus: Any Discernable Long-Run Relationship?
Inter-bank markets are among the most important in the financial system. They are the focus of ce... more Inter-bank markets are among the most important in the financial system. They are the focus of central banks‟ implementation of monetary policy and have a significant effect on the economy. Transactions in the inter-bank funds market provide signal of what obtains in the open credit market. To provide for stability in short-term interest rates, the Monetary Policy Rate (MPR) as the „operating instrument‟ serves as an indicative rate for transactions in the inter-bank money market as well as other deposit money banks' (DMBs) interest rates. It is this relationship between the inter-bank and the monetary policy rates that this paper examined. The findings indicate that the rates are cointegrated and have a long-run relationship, judging from the significance of the unit root test for the residual and the coefficient of the error correction variable in the error correction model. It is, however, the submission of this paper that much more investigation is needed on a number of issu...
An Exam ination of the Relationship between Government Revenue and Government Expenditure in Nigeria: A Cointegration and Causality Approach
Fiscal policy, which entails an appropriate alignment in government revenue and expenditure, is o... more Fiscal policy, which entails an appropriate alignment in government revenue and expenditure, is of crucial importance in promoting price stability and sustainable growth in output, income and employment. It is one of the macroeconomic policy instruments that can be used to prevent or reduce short-run fluctuations in output, income and employment in order to move an economy to its potential level. However, for sound fiscal policy, a good understanding of the relationship between government revenue and government expenditure is very important, for instance, in addressing fiscal imbalances. Thus, the causal relationship between public revenue and public expenditure has been an issue that has generated heated debates globally, over the years, among economists and policy analysts. Four major hypotheses have emanated from the debates namely: the revenue-spend hypothesis (where there is a unidirectional causality from government revenue to government expenditure); the spend-revenue hypothe...
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Papers by Yusuf Bulus