Money supply, Inflation, Nigerian economy, Economic growth


Experience in many countries, including Nigeria, show that fiscal policies, in particular, intended primarily to stimulate output growth and enhance real income often end up as a major source of financial imbalances and macro-economic instability. The accompanying high inflation has critical allocative and distributional implications that can be detrimental to the growth process. It is against this background that, this short paper attempts, to identify the relationship between monetary growth and inflationary developments in Nigeria and the implications for economic growth. Following this Introduction, Thus, the challenge of maintaining monetary stability has often been a difficult one, the world over, owing, among other factors, to the uneasy trade-offs involved the rest of the paper is divided into four major parts, with Part 2 focusing on conceptual issues. Part 3 attempts to delineate the trends in money supply, inflation and economic growth in Nigeria between 1986 and 1996, while Part 4 evaluates policy responses to those trends. In Part 5, the paper concludes by identifying economic policy challenges ahead and the proffered solutions.

Author Bio

The author is a staff of the Central Bank of Nigeria.

Publication Title

CBN Bullion






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