Theoretical Linkages and Policy Implications of Money Supply Management on Macroeconomic Stability in Nigeria

John Okey Onoh PhD; Mbanasor Christian PhD; Iheukwumere Kelechi PhD

doi:10.56201/jbae.vol.11.no6.2025.pg56.81

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Theoretical Linkages and Policy Implications of Money Supply Management on Macroeconomic Stability in Nigeria

John Okey Onoh PhD, Mbanasor Christian PhD, Iheukwumere Kelechi PhD

Abstract

This study examines the theoretical linkages and policy implications of money supply management on macroeconomic stability in Nigeria. Using an Autoregressive Distributed Lag (ARDL) model, the study finds that money supply has a significant impact on inflation stability and economic growth in Nigeria. The results also suggest that fiscal policy, as represented by government expenditure, has a significant impact on inflation stability and economic growth. The study concludes that monetary policy, as represented by money supply and Monetary Policy Rate (MPR), and fiscal policy, as represented by government expenditure, are effective tools for achieving macroeconomic stability in Nigeria. The study recommends that the Central Bank of Nigeria (CBN) should use money supply and MPR as tools to manage inflation and achieve macroeconomic stability, while the government should use government expenditure as a tool to manage inflation and achieve macroeconomic stability. The study also recommends coordination between fiscal and monetary policies to achieve macroeconomic stability. The findings of this study have implications for monetary and fiscal policy decisions in Nigeria.

Keywords

Theoretical LinkagesPolicy ImplicationsMoney Supply Management

References

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Theoretical Linkages and Policy Implications of Money Supply Management on Macroeconomic Stability in Nigeria

Abstract

Keywords

References

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