Justification and Implication of Macroeconomic Management for Sustainable Development

Abstract

The study seeks to determine the relationship between macroeconomic management and sustainable development, identify the macroeconomic policy objectives relevant for attaining sustainable development, assess the macroeconomic policy instruments relevant for macroeconomic management, and identify the standard tools of monetary management. The study was carried out primarily through the survey method and interview of employees in five branches of central bank of Nigeria. Secondary data were obtained through books, journals and internet. Findings indicate that there is a significant relationship between macroeconomic management and sustainable development, full employment, price stability, economic growth, and balance of payments surplus are the macroeconomic policy objectives relevant for attaining sustainable development; monetary policy and fiscal policy are the macroeconomic policy instruments relevant for macroeconomic management, open market operation, reserve requirements, interest rate regulation, and credit control are the standard tools of monetary management. The implications of the study is that monetary policy in a developing country plays an important role in increasing the growth rate of the economy by influencing the cost and availability of credit, by controlling inflation and maintaining equilibrium in the balance of payments. Also the use of variable reserve ratio as an instrument of monetary policy is more effective than open market operations and bank rate policy in developing countries.

Keywords: Macroeconomic management, implication, justification, and Sustainable Development