The impact of monetary policy on private capital formation in Nigeria: Autoregressive Distributed Lag Approach

Authors

  • Olufunke Iyabo Ajoje Department of Economics, Federal University, Oye-Ekiti, Nigeria
  • Olufemi Samuel Adegboyo Department of Economics, Federal University, Oye-Ekiti, Nigeria
  • Yetunde Moriliat Aliu Department of Economics, Federal University, Oye-Ekiti, Nigeria

DOI:

https://doi.org/10.22437/ppd.v10i1.16947

Keywords:

ARDL, Monetary policy, Private capital formation

Abstract

The study examines the impact of monetary policy on private capital formation in Nigeria from 1980 to 2020. The study adopts Keynes's theory of capital formation as its theoretical framework. The stationarity tests show a mixed level of stationarity among the variables. Consequently, the study employs ARDL as its estimation technique. The study reveals that Monetary Policy has a positive impact on Private Capital Formation in Nigeria. Based on the findings, the study recommends that the government should maintain the current  Monetary Policy Rate (MPR) to continue impacting Private Capital Formation positively. Secondly, the government should formulates appropriate policies that will ensure that the  Exchange Rate (EXCHR) is stable so that it can improve the level of Private Capital Formation in Nigeria. Lastly, the government should embark on policies that will curb inflation or help reduce the rate of inflation to increase the level of Private Capital Formation.

 

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Published

2022-04-30

How to Cite

Ajoje, O. I., Adegboyo, O. S., & Aliu, Y. M. (2022). The impact of monetary policy on private capital formation in Nigeria: Autoregressive Distributed Lag Approach. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 10(1), 13 - 22. https://doi.org/10.22437/ppd.v10i1.16947

Issue

Vol. 10 No. 1 (2022): Jurnal Perspektif Pembiayaan dan Pembangunan Daerah

Section

Articles

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Copyright (c) 2022 Olufunke Iyabo Ajoje, Olufemi Samuel Adegboyo, Yetunde Moriliat Aliu

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This work is licensed under a Creative Commons Attribution 4.0 International License.