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ABSTRACT
The analysis ascertained the influence of monetary measures on Nigeria’s economic advancement. It utilized the natural logarithm of GDP as a response variable and several monetary determinants as explanatory variables. The data encompasses 1981-2022 and employs Autoregressive Distributed Lag analysis, unit root tests, and co-integration tests. The findings demonstrate a long-term correlation between the factors. Notably, the analysis revealed that monetary policy rate and inflation possess a negligible positive effect on Nigeria’s economic growth. Inflation holds an insignificant negative sway, whereas the exchange rate significantly hampers Nigeria’s GDP. Collectively, monetary policy explains 97% of the deviations in economic growth in Nigeria. Accordingly, the study advises that monetary policy alone cannot effectively govern the Nigerian economy, but it holds value as a tool for stabilizing prices and driving economic prosperity.
