Economic and Financial Review


Central Bank of Nigeria


Stability, Money multiplier relations, Monetary control, Money supply, Nigeria.


The question of stability over time of the adjusted money multiplier relation is of crucial importance for adjusted base money to act as the main link to money supply. This paper tests the hypothesis of stability of money multiplier relations in Nigeria using the forward recursive cusum of squares that uses a confidence interval which is distributed as Pyke 's modified Kolmogrov-Smirnov statistic. The results of the stability tests applied to monthly data from January, 1991 to December, 1995 suggest that the functions underlying the adjusted money multipliers were not stable between March, I992 and December, I994. The two multiplier relations were, however found to be stable in fiscal 1995, suggesting that the adjusted base money was the main link to the money stock in that period.

Author Bio

The author is a Principal Statistician, Research Department, Central Bank of Nigeria, Abuja

Publication Title

CBN Economic and Financial Review





Recommended Citation

Doguwa, S. I. (1997). On the stability of money multiplier relations in Nigeria: an alternative testing procedure. CBN Economic and Financial Review, 35(1), 1-22.

Included in

Finance Commons



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