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- Title
Demand For Money In Nigeria: Error Correction.
- Authors
Ovenseri-Ogbomo, Friday; Oyedeji, Maria
- Abstract
This paper empirically investigated and analyzes the Demand for money and its determinants in Nigeria between 1981 and 2010 using quarterly data. The time series properties of the data were examined, using cointegration and Error Correction Model (ECM). All variables were cointegrated except Exchange Rate (EXRT) at 5 percent. It was observed that RDGP was cointegrated at second difference. The ECM coefficient which indicates the speed of Adjustment in the short run disequilibrium is adjusted at 5 percent period. It is observed from all analysis that exchange rate is highly sensitive to money demand in Nigeria. The study confirms a long run relationship between real balances and the explanatory variables. These findings indicate that Nigeria could effectively deploy money supply and other monetary instruments in addressing fundamental macroeconomic policy.
- Subjects
NIGERIA; MONEY; SUPPLY &; demand; ECONOMIC equilibrium; FOREIGN exchange rates; MACROECONOMICS -- Government policy
- Publication
Conflict Resolution & Negotiation Journal, 2013, Vol 2013, Issue 2, p120
- ISSN
1946-0236
- Publication type
Article