The Impact of Open Market Operation on Price Stability in Nigeria

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ABSTRACT

Results of monetary policy outcomes suggest that Nigeria does not enjoy ideal conditions for adopting
a monetary policy regime aimed primarily at stabilizing prices under a freely floating exchange rate.
The reasons often advocated is that Nigeria faces a very volatile macroeconomic environment and a
more acute inflation-output trade-off than other emerging market economies which have embraced
price stabilization programs and thereby abandoning their exchange rate anchors. Moreover, Nigeria
has an intense exchange of goods and services with the rest of the world which is stronger than other
emerging market economies, thanks to its mainly oil-exporting-oriented economy. This can make
Nigeria particularly exposed to price and quantity-type external shocks, which renders price
stabilization all the more complicated. Open Market Operation is one of the monetary policy tools of
the Central Bank of Nigeria which entails the sale or purchase of eligible bills or securities in the open
market by the Central Bank of Nigeria for the purpose of influencing deposit money, banks’ reserve
balances, and the level of base money which is effectively aimed at achieving the price objectives of
the Central Bank of Nigeria. Thus, this study sought to: examine the impact of Open market
operation on the maintenance of Exchange rate price stability in Nigeria and determine the
impact of Open market operation on the maintenance of consumer price stability in Nigeria.
The research design adopted for this study is the ex post facto research design. This enabled the
researcher make use of secondary data. Annualized data from 1993 to 2007 of proxies from the
Central Bank of Nigeria statistical bulletin were used. The Linear Regression Model (LRM)
estimation technique using SPSS statistical software was used to evaluate the stated objectives where
rate values of Open Market Operation Rate (OMOR) as proxy for Open Market Operation (OMO)
which is the independent variable while Nominal Effective Naira Exchange Rate Indices (EXR),
Inflation Rate (INFR) and Gross Domestic Product Growth Rate (GDPGR) as a control variables. The
result revealed that open market operation has a negative non-significant impact on exchange
rate in Nigeria (t = -0.025, coefficient of OMOR = -0.003) and open market operation has
positive non-significant impact on inflation rate in Nigeria (t = 1.604, coefficient of OMOR =
0.047). As revealed from the findings in this research the use of open market operation as a
monetary policy tool have actually influence consumer price stability in Nigeria hence the
study recommends among others that an increased use of open market operations as a tool for
achieving price stability in Nigeria and a conscious effort monetary authorities in bring the
informal sector into the main stream of the Nigeria economy. This will help to expand as well
as capture the huge funds in the informal sector which is presently not captured.

TABLE OF CONTENTS

Title Page i
Approval Page ii
Certification Page iii
Dedication iv
Acknowledgements v
Abstract vii
List of Tables x
List of Figures xi
List of Appendixes xii
CHAPTER ONE INTRODUCTION
1.1 Background of the Study . . . . . . 1
1.2 Statement of Problems. . . . . . . 3
1.3 Objectives of the Study. . . . . . . 6
1.4 Research Questions. . . . . . . . 6
1.5 Research Hypotheses. . . . . . . . 6
1.6 Scope of the Study. . . . . . . . 6
1.7 Significance of the Study. . . . . . . 7
1.8 Definition of Terms. . . . . . . . 8
References. . . . . . . . . 9
CHAPTER TWO REVIEW OF RELATED LITERATURE
2.1 Monetary Policy Framework in Nigerian. . . . . 12
2.2 Measuring the Effects of Monetary Policy Innovations in Nigeria. . 13
2.3 Nigeria’s Monetary Policy and the Rationale for Adoption. . . 16
2.3.1 The Exchange Rate Targeting Regime (1959-1973). . . . 16
2.3.2 Monetary Targeting Regime (1974 to Date). . . . . 16
2.3.3 Direct Control (1974-1992). . . . . . . 17
2.3.4 Instruments of Monetary Policy under Indirect Monetary Control Regime 19
2.4 Constraints on Monetary Policy Management in Nigeria. . . 21
2.4.1 Fiscal Dominance. . . . . . . . 21
2.4.2 Liquidity Overhang. . . . . . . . 21
2.4.3 Oligopolistic Banking System. . . . . . 22
2.4.4 Data. . . . . . . . . . 22
9
2.4.5 Dualistic Financial and Products Market. . . . . 22
2.4.6 Inefficient Payments System. . . . . . . 22
2.5 Way Ahead for Monetary Policy in Nigeria. . . . . 23
2.6 Maintaining Price Stability in Nigeria. . . . . 23
2.7 Monetary Policy and Exchange-Rate Targeting. . . . 29
2.8 Brief History of Inflation in Nigeria: 1980–2007. . . . 38
2.9 Monetary Policy and Inflation Targeting. . . . . 40
2.10 The Effectiveness of Anticipated Monetary Policy. . . . 48
2.11 Monetary Policy in the Information Economy. . . . 52
2.12 Monetary Policy Evaluation with Noisy Information. . . 53
2.13 Historical Monetary Policy Analysis and the Taylor Rule. . . 56
References. . . . . . . . . 58
CHAPTER THREE RESEARCH METHODOLOGY
3.1 Research Design. . . . . . . . 66
3.2 Sources of Data. . . . . . . . 66
3.3 Explanatory Variables . . . . . . . 66
3.3.1 Independent Variables . . . . . . 66
3.3.2 Dependent Variable. . . . . . . . 67
3.3.3 Control Variable. . . . . . . . 67
3.4 Model Specification. . . . . . . . 67
3.5 Model Justification. . . . . . . . 68
3.6 Techniques of Analysis. . . . . . . 69
References. . . . . . . . . 70
CHAPTER FOUR PRESENTATION AND ANALYSIS OF DATA
4.1 Presentation of Data. . . . . . . . 71
4.2 Test of Hypotheses. . . . . . . . 73
4.2.1 Test of Hypothesis One. . . . . . . 73
4.2.2 Test of Hypothesis Two. . . . . . . 74
CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.1 Summary of Findings and Policy Implications. . . . 76
5.2 Conclusion. . . . . . . . . 77
5.3 Recommendation. . . . . . . . 77
5.4 Recommended Areas for Further Studies. . . . . 79
10
References. . . . . . . . . 81
Appendixes. . . . . . . . . 82
Bibliography. . . . . . . . . 85
11
LIST OF TABLES
Table 4.1 Presentation of Model Proxies from 1993-2007. . . 71
Table 4.2 Regression and Correlation Results for hypothesis One . 73
Table 4.3 Regression and Correlation Results for hypothesis Two . 74
12
LIST OF FIGURES
Figure 4.1 Graphical Presentations of Table 4.1. . . . . 72
13
LIST OF APPENDIXES
Appendix One Presentation of Model Proxies from 1993-2007. . 82
Appendix Two Hypothesis One. . . . . . 83
Appendix Three Hypothesis Two. . . . . . 84

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In general terms, monetary policy refers to a combination of measures designed to regulate
the value, supply and cost of money in an economy, in consonance with the expected level of
economic activity. For most economies, the objectives of monetary policy include price
stability, maintenance of balance of payments equilibrium, promotion of employment and
output growth, and sustainable development. These objectives are necessary for the
attainment of internal and external balance, and the promotion of long-run economic growth
(Nnanna, 2001).
The importance of price stability is derived from the harmful effects of price volatility, which
undermines the ability of policy makers to achieve other laudable macroeconomic objectives.
There is indeed a general consensus that domestic price fluctuation undermines the role of
money as a store of value, and frustrates investments and growth. Empirical studies (Ajayi
and Ojo, 1981) on inflation, growth and productivity have confirmed the long-term inverse
relationship between inflation and growth. When decomposed into its components, that is,
growth due to capital accumulation, productivity growth, and the growth rate of the labour
force, the negative association between inflation and growth has been traced to the strong
negative relationships between it and capital accumulation as well as productivity growth,
respectively. The import of these empirical findings is that stable prices are essential for
growth.
The success of monetary policy depends on the operating economic environment, the
institutional framework adopted, and the choice and mix of the instruments used. In Nigeria,
the design and implementation of monetary policy is the responsibility of the Central Bank of
Nigeria (CBN). The mandates of the CBN as specified in the CBN Act of 1958 include;
issuing of legal tender currency, maintaining external reserves to safeguard the international
value of the currency, promoting monetary stability and a sound financial system and acting
as banker and financial adviser to the Federal Government.
However, the current monetary policy framework focuses on the maintenance of price
stability while the promotion of growth and employment are the secondary goals of monetary
policy (see, Nnanna, 2001). In Nigeria, the overriding objective of monetary policy is price
15
and exchange rate stability (see, CBN, 2001). The monetary authority’s strategy for inflation
management is based on the view that inflation is essentially a monetary phenomenon.
Because targeting money supply growth is considered as an appropriate method of targeting
inflation in the Nigerian economy, the Central Bank of Nigeria (CBN) chose a monetary
targeting policy framework to achieve its objective of price stability. With the broad measure
of money (M2) as the intermediate target, and the monetary base as the operating target, the
CBN utilized a mix of indirect (market-determined) instruments to achieve it monetary
objectives. These instruments included reserve requirements, open market operations on
Nigerian Treasury Bills (NTBs), liquid asset ratios and the discount window (see IMF
Country Report No. 03/60, 2003).
Onafowora (2007 say the CBN’s focus on the price stability objective was a major departure
from past objectives in which the emphasis was on the promotion of rapid and sustainable
economic growth and employment. Prior to 1986, the CBN relied on the use of direct (nonmarket)
monetary instruments such as credit ceilings on the deposit money of banks,
administered interest and exchange rates, as well as the prescription of cash reserves
requirements in order to achieve its objective of sustainable growth and employment. During
this period, the most popular instruments of monetary policy involved the setting of targets
for aggregate credit to the domestic economy and the prescription of low interest rates. With
these instruments, the CBN hoped to direct the flow of loanable funds with a view to
promoting rapid economic development through the provision of finance to the preferred
sectors of the economy such as the agricultural sector, manufacturing, and residential housing
(see, Onafowora, 2007).
During the 1970s, the Nigerian economy experienced major structural changes that made it
increasingly difficult to achieve the aims of monetary policy. The dominance of oil in the
country’s export basket began in the 1970s. Furthermore, the rapid monetization of the
increased crude oil receipts resulted in large injections of liquidity into the economy, induced
rapid monetary growth. Between 1970 and 1973, government spending averaged about 13
percent of gross domestic product (GDP), and this increased to 25 percent between 1974 and
1980. This rapid growth in government spending came not from increased tax revenues but
the absorption of oil earnings into the fiscal sector, which moved the fiscal balance from a
surplus to a deficit that averaged about 2.5% of GDP a year. This new era of deficit spending
led the government to borrow from the banking system in order to finance the domestic
16
deficits. At the same time, the government was saddled with foreign deficits, which had to be
financed through massive foreign borrowing and the drawing down of external reserves. To
reverse the deteriorating macroeconomic imbalances (declining GDP growth, worsening
balance of payment conditions, high inflation, debilitating debt burden, increasing fiscal
deficits, rising unemployment rate, and high incidence of poverty), the government embarked
on austerity measures in 1982. The austerity measures was successful judging by the fall in
inflation rate to a single digit, the significant improvement in the external current account to
positions of balance. However, these improvements were transitory because the economy did
not establish a strong base for sustained economic growth (see, Onafowora, 2007).
Having examined the objectives of monetary policy in Nigeria, this study intends to find out
the impact of monetary policy through the use of open market operation in enhancing
economic stability in Nigeria.
1.2 STATEMENT OF THE PROBLEM
Results of monetary policy outcomes suggest that Nigeria does not often enjoy ideal
conditions to adopting a monetary policy regime aimed primarily at stabilizing prices under a
freely floating exchange rate. There could be possible reasons for this. The Nigerian
macroeconomics environment often do faces a very volatile macroeconomic environment and
a more acute inflation-output trade-off than other emerging market economies which have
embraced price stabilization programs and thereby abandoned their exchange rate anchors.
Moreover, it could often observed that Nigeria has an intense exchange of goods and services
with the rest of the world, and one that is stronger than other emerging market economies,
thanks to its mainly oil-exporting-oriented economy. This can make it particularly exposed to
price and quantity-type external shocks, which renders price stabilization all the more
complicated. Although Nigerian consumer price index is not that sensitive to commodity
price shocks notably shocks to the price of oil changes in the Nigerian exchange rate are
passed through sizably and significantly (Batini and Morsink, 2004). Thus, given the above,
the problems associated with the use of open market operation as monetary policy tools given
the objectives of monetary policy in an economy of maintaining stability are: price instability
and exchange rate instability in Nigeria.
17
Nigerian consumer prices is so volatile, and more dramatic than in other emerging market
economies countries, this have created problems for the conduct of a monetary policy aimed
at price stability because optimal policy responding to exchange rate shocks depends on the
source and duration of the shock, which are typically unknown and hard to decipher in an
unstable macroeconomic environment. Judging by the risk premium on dollar-denominated
Nigerian sovereign debt relative to same risk premia of other emerging market economies’
debt, the Nigerian fiscal policy appears extremely vulnerable a reflection of the fact that the
Nigerian central bank is fiscally dominated in the sense of Masson et al (1997). The size and
volatility of the Nigerian risk premium on government debt means that the Nigerian exchange
rate, as well as short- and long-term rates, may vary endogenously with the debt-to-GDP
ratio. Both facts indicate that it is hard, if not impossible, in the current circumstances to talk
about active monetary policy in Nigeria of whatever kind. As emphasized in Favero and
Giavazzi (2003), large and variable term premia and credit risks reinforce the possibility that
a vicious circle might arise, making the fiscal constraint on monetary policy more stringent.
Given these conditions, it is reasonable to expect that aiming for and adopting a stable
prices/free float regime in the long run in Nigeria may not lead to successful outcomes. In
addition to not achieving the intended aims, it could be argued that pursuing unsuccessfully a
price stabilization regime may harm the credibility of the central bank going forward. Sims
(2003), for instance, emphasized that when conditions are such that an inflation targeting
commitment has a high probability of proving unsustainable like when the necessary fiscal
backup to monetary policy is not available embracing nevertheless explicit inflation targets
can be unproductive or lead to an initial success that only amplifies a later failure.
Exchange rate target results in the loss of independent monetary policy. With open capital
markets, an exchange-rate target causes domestic interest rates to be closely linked to those of
the anchor country. The targeting country thus loses the ability to use monetary policy to
respond to domestic shocks that are independent of those hitting the anchor country.
Furthermore, an exchange-rate target means that shocks to the anchor country are directly
transmitted to the targeting country because changes in interest rates in the anchor country
lead to a corresponding change in interest rates in the targeting country (Clarida, Gali and
Gertler (1997). Exchange rate targets have been pointed out forcefully in Obstfeld and Rogoff
(1995), where they say exchange rate targets leave countries open to speculative attacks on
their currencies. An exchange rate target in emerging market countries that suggests that for
them this monetary policy regime is highly dangerous and is best avoided except in rare
18
circumstances. Exchange rate targeting in emerging market countries is likely to promote
financial fragility and possibly a fully fledged financial crisis that can be highly destructive to
the economy. To see why exchange-rate targets in an emerging market country make a
financial crisis more likely, we must first understand what a financial crisis is and why it is so
damaging to the economy.
Studies evaluating the costs of inflation have long established the desirability of avoiding not
only high but even moderate inflation (Fischer and Modigliani, 1978; Fischer, 1981; and
more recently Driffill, et., al, 1990 and Fischer, 1994), However, there is still a serious debate
on whether the optimal average rate of inflation is low and positive, zero, or even moderately
negative (Tobin, 1965 and Friedman, 1969). An important issue in this debate concerns the
reduced ability to conduct effective countercyclical monetary policy when inflation is low.
As pointed out by Summers (1991), if the economy is faced with a recession when inflation is
zero, the monetary authority is constrained in its ability to engineer a negative short-run real
interest rate to damp the output loss. This constraint reflects the fact that the nominal shortterm
interest rate cannot be lowered below zero the zero interest rate bound (Hicks, 1937
interpretation of the Keynesian liquidity trap and Hicks, 1967). This constraint would be of
no relevance in the steady state of a non-stochastic economy. Stabilization of the economy in
a stochastic environment, however, presupposes monetary control which leads to fluctuations
in the short-run nominal interest rate. Under these circumstances, the non-negativity
constraint on nominal interest rates may occasionally be binding and so may influence the
performance of the Economy. Although inflation targeting does appear to be successful in
moderating and controlling inflation, the likely effects of inflation targeting on the real side
of the economy are more ambiguous. Economic theorizing often suggests that a commitment
by a central bank to reduce and control inflation should improve its credibility and thereby
reduce both inflation expectations and the output losses associated with disinflation.
Experience and econometric evidence (see Almeida and Goodhart, 1998, Laubach and Posen,
1997, Bernanke, Laubach, Mishkin and Posen, 1998) does not support this prediction,
however. Inflation expectations do not immediately adjust downward following the adoption
of inflation targeting. Furthermore, there appears to be little if any reduction in the output loss
associated with disinflation, the sacrifice ratio, among countries adopting inflation targeting.
19
1.3 OBJECTIVES OF THE STUDY
As a result of the problems stated above, the main objectives of this study are;
1. To examine the impact of Open market operation on the maintenance of Exchange
rate price stability in Nigeria
2. To determine the impact of Open market operation on the maintenance of consumer
price stability in Nigeria
1.4 RESEARCH QUESTIONS
As a result of the above objectives, the following research questions emanate:
1. To what extent does Open market operation in Nigeria assist in the maintenance of
exchange rate price stability? and
2. To what extent does Open market operation impact on the maintenance of consumer
price stability in Nigeria?
1.5 RESEARCH HYPOTHESES
Following the research questions raised above, the following hypotheses are stated;
1. Open market operation does not have a significant positive impact on exchange rate
price stability in Nigeria
2. Open market operation does not have a significant positive impact on consumer price
stability in Nigeria.
1.6 SCOPE OF THE STUDY
This study covers the period 1993 to 2008. OMO was introduced at the end of June 1993 and
is conducted wholly on Nigerian Treasury Bills (NTBs), including repurchase agreements
(repos). OMO entails the sale or purchase of eligible bills or securities in the open market by
the CBN for the purpose of influencing deposit money, banks’ reserve balances, and the level
of base money and consequently the overall level of monetary and financial conditions. In
this transaction, banks subscribing to the offer, through the discount houses, draw on their
reserve balances at the CBN thereby reducing the overall liquidity of the banking system and
the banks’ ability to create money via credit. In implementing the OMO, the Research
Department of the CBN advises the trading desk at the Banking Operations Department, also
20
of the CBN, on the level of excess or shortfall in bank reserves. Thereafter, the trading desk
decides on the type, rate and tenor of the securities to be offered and notifies the discount
houses 48 hours ahead of the bid date. The highest bid price lowest discount rate quoted) for
sales and the lowest price offered (highest discount offer) for purchases, with the desired size
or volume, is then accepted by the CBN (Nnanna, 2001).
1.7 SIGNIFICANCE OF THE STUDY
This study will be significant to the following groups;
1. MONETARY POLICY MAKERS
Monetary policy decisions are made in real time and are based, by necessity, on preliminary
data and estimates that contain considerable noise and are often substantially revised months
or years after the event. While part of everyday life for policymakers, this aspect of the
monetary policy process is often neglected in theoretical formulations of monetary policy,
introducing a wedge between the promise of macroeconomic theory and the reality of
macroeconomic practice. Recognition of the complications resulting from the presence of
noise is important for the study of monetary policy for two reasons: First, the evaluation of
past policy is incorrect when it is based on the wrong data. That is, our understanding of the
past becomes distorted. Second, the evaluation of alternative policy strategies is unrealistic
and likely to mislead if it is based on the assumption that policy can react to either data that
are not really available to policymakers when policy must be set or that are only available
with substantial noise. That is, recommendations for better policy in the future become
flawed, thus, this study will assist policy makers in formulating policies that conforms with
the objectives of monetary policy.
2. ACADEMIC PURPOSE
The conduct of monetary policy in Nigeria under the colonial government was largely
dictated by the prevailing economic conditions in Britain. The instrument of monetary policy
at that time was the exchange rate, which was fixed at par between the Nigerian pound and
the British pound. This was very convenient, as fixing the exchange rate provided a more
effective mechanism for the maintenance of balance of payments viability and for control
over inflation in the Nigerian economy. This study thus will trace the history of monetary
21
policy in Nigeria, especially the use of open market operation as a tool of monetary policy in
Nigeria since 1993. There, it will contribute to the volume of literatures in this area of
finance.
3. GENERAL AND INTERESTED PUBLIC
It is argued that if residents evaluate their asset portfolio in terms of the domestic currency, a
depreciation of the exchange rate that increases the value of their foreign holdings would
enhance wealth. To maintain a fixed share of the wealth invested in domestic assets, residents
will shift parts of their foreign holdings to domestic assets, including domestic currency. The
increase in the share of wealth held in domestic assets, including domestic currency, suggests
a rise in the demand for the domestic currency. Thus, this study will be significant to the
general and interested public because it will help them to decide on how to increase economy
wellbeing.
1.8 DEFINITION OF TERMS
The following terms as they relate to this study are defined:
Monetary Policy: a combination of measures designed to regulate the value, supply and cost
of money in an economy, in consonance with the expected level of economic
activity (Nnanna, 2001).
Open Market Operation: OMO entails the sale or purchase of eligible bills or securities in
the open market by the CBN for the purpose of influencing deposit money, banks’
reserve balances, and the level of base money and consequently the overall level of
monetary and financial conditions (Nnanna, 2001).
Inflation Targeting: Inflation targeting involves, public announcement of medium-term
numerical targets for inflation, an institutional commitment to price stability as the
primary and increased accountability of the central bank for attaining its inflation
objectives (Mishkin, 1998)
Exchange rate Targeting: the form of fixing the value of the domestic currency to a
commodity such as gold (Mishkin, 1998).
22
Price Stability: measures that ensure that inflation rate is in a single digit and stable
(Onafowora, 2007) or Price stability obtains when economic agents no longer take
account of the prospective change in the general price level in their economic decision
making” (Greenspan, 1996).
23
REFERENCES
Ajayi, S. I and Ojo, O. O (1981), Monetary and Banking Analysis and Policy in the Nigerian
Context, London: George Allen and Union Ltd
Almeida, A., and Goodhart, C.A E. (1998), “Does the Adoption of Inflation targets affect
Central Bank behaviour?” Unpublished paper, London School of Economics, January
Batini, N., and Gobat, J. H, (2004), “The transition to a New Monetary Regime in Nigeria:
Challenges and Goals,” Paper presented at the 3rd annual conference on Rebuilding
the Nigerian Financial System, Organized by the Money Market Association of
Nigeria, Abuja, Nigeria, May 13–15.
Bernanke, B. S., Laubach, T., Posen A. S. and Mishkin F. S. (1998), Inflation targeting:
lessons from the International Experience, Princeton, New Jersey: Princeton
University Press
Central Bank of Nigeria, (1979) ‘‘Twenty Years of Central Banking in Nigeria’’, Central
Bank of Nigeria: Lagos
Central Bank of Nigeria, (2001) Central Bank of Nigeria, Monetary, Credit, Foreign Trade
and Exchange Policy Guidelines for 2001 Fiscal Year, Abuja, Nigeria, Central Bank
of Nigeria
Clarida,R., Galí J, and Gertler, M (1999), ‘‘Science of Monetary Policy: A New Keynesian
Perspective’’, Journal of Economic Literature, Vol. 37, December: pp 1661-1707
Driffill, J., Grayham, M., and Alistair, U. (1990), ‘‘Costs of Inflation,” in Handbook of
Monetary Economics, Benjamin M. F., and Frank, H Eds., Amsterdam; North Holland
Favero, C., and Francesco, G. (2003), “Targeting Inflation when debt and Risk Premia are
High: Lessons from Brazil” Unpublished Paper Università Luigi Bocconi; Milano,
Italy
Fischer, S. and Modigliani, F. (1978), ‘‘Towards an Understanding of the Real Effects of
Inflation,” weltwirtschaftliches archive, 114: pp 810-832.
Fischer, S. (1981), ‘‘Towards an Understanding of the Costs of Inflation: ii” in the costs and
Consequences of inflation’’, Carnegie-Rochester Conference Series on Public Policy,
Vol. 15
Fischer, S. (1994) ‘‘Modern Central Banking, In: the Future of Central Banking’’ the
Tercentenary symposium of the Bank of England: Cambridge university press
Friedman, M. (1969), The Optimum Quantity of Money and Other Essays, Chicago:
University of Chicago
Greenspan, A. (1996) “Opening Remark”, in Achieving Price Stability, a Symposium
Sponsored by the Federal Reserve Bank of Kansas City: Jackson Hole, Wyoming,
August 29-31
24
Hicks, J. (1937), ‘‘Mr. Keynes and the Classics’’ Econometrica, 5(2), April
Hicks, J. (1967), Classical Essays in Monetary Theory, London: Oxford University
International monetary fund (IMF), (2003), “Nigeria: Selected Issues and Statistical
Appendix, IMF Country Report No. 03/60”, IMF; Washington, DC
Laubach, T., and Posen, A. S. (1997) “Some Comparative Evidence on the Effectiveness of
Inflation Targeting,” Federal Reserve Bank of New York Working Paper #97-14
(May)
Mishkin F. S. (1998), ‘‘International Experiences with different Monetary Policy Regimes’’
Institute for International Economic Studies, Stockholm University Seminar Paper
No. 648,
Nnanna, O. J. (2001), “Monetary Policy Framework in Africa: the Nigerian Experience”,
Central Bank of Nigeria: Abuja
Obstfeld, M., and Rogoff. K. (1995), “The Mirage of Fixed Exchange Rates” Journal of
Economic Perspectives, Vol 9, No.4: pp 73-96
Onafowora, O. A and Oluwole, O. (2007) ‘‘M2 Targeting, Money Demand, and Real GDP
Growth in Nigeria: Do Rules Apply?’’, Journal of Business and Public Affairs,
Volume 1, Issue 2,
Sims, C. (1994) “A Simple Model for the determination of the price level and the interaction
of Monetary and Fiscal Policy”, Econometrica, Vol. 4,
Summers, L. (1991), ‘‘How Should Long-term Monetary Policy be determined’’ Journal of
Money, Credit and Banking, 23(3), August, part 2: pp 625-31
Tobin, J. (1965), ‘‘Money and Economic Growth’’ Econometrica, Vol. 33: pp 334-361

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