Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/242504
Year of Publication: 
2011
Series/Report no.: 
Economics Working Paper Series No. 2011/02
Publisher: 
Auckland University of Technology (AUT), Faculty of Business, Economics and Law, Auckland
Abstract: 
This paper presents an empirical investigation into the level and stability of money demand (M1) in Nigeria between 1960 and 2008. In addition to estimating the canonical specification, alternative models are presented that include additional variables to proxy for the cost of holding money. Results suggest that the canonical specification is well-determined, the money demand relationship went through a regime shift in 1986 which slightly improved the scale economies of money demand, and money demand is stable. These findings question the appropriateness of the Central Bank of Nigeria's new monetary policy framework in which short-term interest rates play a crucial role and imply that Nigeria could effectively use the supply of money as an instrument of monetary policy.
Subjects: 
Money demand
Structural breaks
Cointegration
Monetary policy
JEL: 
E21
C22
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.