Original scientific paper
https://doi.org/10.32728/ric.2018.34/4
MONETARY POLICY AND THE SUSTAINABILITY OF THE MANUFACTURING SECTOR IN NIGERIA
Adegbemi Babatunde Onakoya
orcid.org/0000-0002-7583-5083
; (1) Department of Economics Babcock University, Ilishan - Remo, Nigeria
Grace Oyeyemi Ogundajo
; (2) Department of Accounting Babcock University, Ilishan - Remo, Nigeria
Babatunde Solomon Johnson
; (3) Department of Economics, Babcock University, Ilishan - Remo, Nigeria
Abstract
The conflicting results in relationship between monetary policy and the sustainability of the manufacturing sector necessitated this research. The study carried out some preliminary tests including the descriptive statistics and the Augmented Dickey Fuller unit root tests. The optimal lag length criteria, and the Johansen Co-Integration test were applied to verify long run association among the series. The Vector Error Correction model was estimated as a verification of the short run adjustment. The Breusch-Godfrey Serial Correlation Lm test, Durbin Watson Statistic, and Breusch-Pagan Heteroscedasticity tests were conducted. The results confirmed the existence of a long run relationship among the variables. A positive relationship between monetary policy and manufacturing sector performance in Nigeria was observed at the 5% level of statistical significance. No short run association between the external reserves and inflation rates was recorded. The study therefore recommends that the government avoid monetary policy summersaults.
Keywords
Monetary Policy; Manufacturing output; Inflation; Interest rate; Foreign Exchange rate
Hrčak ID:
191333
URI
Publication date:
22.12.2017.
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