Money Supply and Economic Growth in Nigeria: An Econometric Analysis (1985-2011)

Abstract

This Paper provides further evidence on the role of money supply on economic growth in Nigeria between 1985-2012. Using augmented Cobb-Douglas production function and relying on co-integration/Error- Correction Methodology, it is found that money supply does not only have a positive impact on economic growth in Nigeria, but such impact is strongly and statistically significant. Thus, greater emphasis should be on the improvement of the monetary policies, instruments and institutions in Nigeria if their contribution to Nigeria’s economic growth is to be maximized.

Keywords: Money, Money Supply, Monetary Policy, Economic Growth, National Output (GDP).