Asaleye, Abiola John and Popoola, M.O. and Lawal, Adedoyin Isola and Ogundipe, Adeyemi A. and Ezenwoke, Omotola (2018) The credit channels of monetary policy transmission: implications on output and employment in Nigeria. Banks and Bank Systems, 13 (4).
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Abstract
There has been an increasing trend in the unemployment rate despite the growth rate witnessed. Monetary policy is presumed as one of the ways to improve the situation. Likewise, the relationship between monetary policy and employment has generated controversial debates in the literature. Though its connection has been extensively studied, however, the implications of monetary policy in respect to time frame per�spectives on employment and output have not been widely addressed in the literature. This study provides evidence on shock effects, long and short-run impacts of mon�etary policy transmission through the credit channels on output and employment in Nigeria within the period of 1981 to 2016 using the Structural Vector Autoregression and Autoregressive distributed lags (ARDL). Evidence from the forecast error shock showed that variations in monetary policy indicators affect output more than employ�ment in the first two periods; however, it affects employment more afterwards. The ARDL results show no evidence of cointegration when output is used as the dependent variable; conversely, cointegration exists when employment is used as the dependent variable. The monetary policy indicators: money supply, bank deposit liability and in�terest rate are statistically and economically significant with employment in the long run. In the short run, money supply and interest rate are economically and statisti�cally significant. The findings revealed that the Nigerian government can maximize the long-run benefits of monetary policy through the credit channels on employment. Hence, there is a need for policymakers to look beyond short-run gain and promote long-run employment via monetary policy among others.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | credit channels, monetary policy, output, employment |
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HG Finance |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | Mrs Hannah Akinwumi |
| Date Deposited: | 07 Jul 2021 15:40 |
| Last Modified: | 07 Jul 2021 15:40 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/15216 |
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