Monetary Policy vs. Fiscal Policy: What's the Difference?
In Nigeria, monetary policy has been used since the Central Bank of Nigeria (CBN) was saddled the responsibility of formulating and implementing monetary policies by Central Bank Act of 1958. This role has facilitated the emergence of active money market where treasury bills, a financial instrument used for Open Market Operations and raising debt for government has grown in volume and value.
Nigeria specifically in the long run, thus some time with lag. Although monetary and fiscal policy variables have a dominant effect on economic activity, it is clear from this study that economic activity is dominated by its own dynamics in most of the periods. The estimates presented in this paper suggest that both monetary and fiscal policy exert greater impact on real GDP and inflation in.
Adebiyi (2009) investigated the relationship between inflation and monetary policy in Nigeria and Ghana using a Vector Autoregressive models with some financial variables such as money supply, interest rates, price and exchange rate, the result shows that inflation is an inertial phenomenon in Nigeria and Ghana, and that money innovations are not strong and statistically important in the.
Monetary policy is of importance to every developing nation. But despite the various monetary regimes that have been adopted by the central Bank of Nigeria has experienced high volatility in inflation rates. Since the early 1970’s there have been four major episodes of high inflation in excess of 30 percent. The growth was often in excess of.
The government sets fiscal and monetary policy in response to the state of the economy. As you will see, policy changes can either stimulate a flagging economy or bolster one that is already doing well. Read on to find out how how these changes can directly impact your business. Monetary Policy vs. Fiscal Policy. Fiscal and monetary policy have similar end goals. The government could use.
Since the beginning of 2000s, however, the role of fiscal and monetary policy has started to become more active. Fiscal deficits and public debt levels in EMEs as a whole have declined substantially. Domestic financing has increased, and the share of foreign currency debt has fallen dramatically. And the average public debt maturity has lengthened significantly. What do these developments mean.
This article aims at determining the impact of various components of fiscal policy on the Nigerian economy. We simply used descriptive statistics to show contribution of government fiscal policy to economic growth, and to ascertain and explain growth rates, and an ordinary least square (OLS) in a multiple form to ascertain the relationship between economic growth and government expenditure.