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Periodical article | Leiden University catalogue | WorldCat |
Title: | Financial liberalization and the demand for money in Nigeria |
Authors: | Ikhide, S.I. Fajingbesi, O. Okunade, A.T. |
Year: | 1993 |
Periodical: | Eastern Africa Economic Review |
Volume: | 9 |
Issue: | 2 |
Pages: | 307-315 |
Language: | English |
Geographic term: | Nigeria |
Subject: | money demand |
Abstract: | This work attempts to estimate a simple model of the demand for money in Nigeria in light of recent changes that are taking place in the economy. Specifically, most models of the demand for money in less developed countries play down the role of interest rates because of the low level of financial development and the arbitrary ceiling placed on interest rates in these economies. The introduction of the structural adjustment programme in Nigeria in 1986 witnessed the removal of these ceilings, as interest rate deregulation replaced an era of financial repression. Using the ordinary least squares estimation technique on quarterly data over the period 1970-1989 and course quantity testing for structural shifts, the authors show that, contrary to earlier findings, interest rate is an important variable in the demand for money in Nigeria. Among others, they establish that the broad definition of money might be more relevant in the Nigerian economy. Their results also support the need to give more emphasis to monetary policy in pursuance of the objectives of growth in the level of output. Bibliogr., notes, ref., sum. |