ABSTRACT
This research work was embarked to
study the effectiveness of monetary policy in controlling inflation in Nigeria. The need to the study was informed by the
tend inflationary growth over the years and also the impact of the inflation in
achievement of the five basic economic growth, price stability, high level of
employment and law inflationary rate for favourable balance of payment. Many research work have been carried out on
the issue previously but despites all the goods policies of government and its
agent these goal have remained elusive over the years. There was therefore a need for a study data
was gathered throughout the secondary source which include money supply gross
domestic product and the inflationary rate for a period.
TABLE OF CONTENTS
Title
page ii
Approval
page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of
content vii
CHAPTER ONE
Introduction 1
1.1
Background of the study 1
1.2
Statement of the study 2
1.3
Objective of the study 4
1.4
Significance of the study 4
1.5
Limitations of the study 6
CHAPTER TWO
2.1
Review of related literature 7
2.2
Objective of monetary policy 10
2.3
Instruments of monetary policy 11
2.4
Inflation in nigeria 14
2.5
Type of inflation 16
2.6
Causes of inflation 17
CHAPTER THREE
Research
design and methodology 19
3.1
Source of data 19
3.2
Secondary data 19
3.3
Location of data 19
3.4
Methods of data 20
CHAPTER FOUR
4.1
Findings 22
CHAPTER FIVE
Recommendations
and conclusion 25
5.1
Recommendations 25
5.2
Conclusion 26
Bibliography 27
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND
OF THE STUDY
In
Nigeria the central bank which is at the apex of the banking apples a variety
of policy measure and technique with which to control and regulate money and
credit in other to attain the desire for necessary to sue the package of
discussing the efficiency or other wise of general economic management
strategies.
Government
policy statement clearly revered that inflation become a problem in Nigeria
about early 1970s.
The
contention can be sustained further by the fact that the economic began to
experience double digit rate of inflationary from the early part of the decade
probably the power of the inflation is not peculiar to Nigeria government, But
it is generally problem confronting Nigeria government to attain a
higher level of economic development as the period generally lead to inflation
any spiral in the country.
But
whether inflation in Nigeria is due to monetary mismanagement on the part of
the authorities concerned or caused by inherent structure deficiency still
remain uncertain, many factors have been identified to be responsible for
inflationary pressure in the economic in a symposium in Nigeria held sometime go,
mot of the participants stressed on money supply nature of government
expenditure limitation in real output and the influence comported as the major
causes inflation in Nigeria.
In the
process of formulating monetary policy, it is of government.
1.2
STATEMENT
OF THE PROBLEM
Many
attempts have been made by the Nigeria
authorities to attain higher rates generally being accompanied by certain
digress of price increase in recent into years.
The
phenomenon developed into several and pronged inflation and stagflation indeed,
it is increasingly being recognized that a process of rapid economic growth is
likely to provoke inflation and pressure.
However,
whether the problem of inflation in this country is due to mismanagement of
monetary policy tools structural deficiencies still remain a contriver sail
mother.
During
the last decade, the problem of inflation or reflation to economic growth and
development have been extensively discussed.
This problem is not peculiar to Nigeria, but has ashamed global
phenomena on. It is generally agreed
world wide that inflation is socially unjust.
Inflation also affects generally economic behaviour and the patter or
resources allocation. By disporting price
relation and under mining general confidence prolonged tends to direct investments
way from production section, and this slacker growth.
Further
more, inflation discourages private savings and encourages speculation among
the various economic units.
Another
consequence is that it result in balance of payment difficulties and reduces
the extend having it national economic management straggle largely informed by
new classical and Keynesian persuasions have stronge over decades.
1.3
OBJECTIVE
OF THE STUDY
It is
necessary to shuttle the primary objectives of this research having identified
the ruling monetary policy instruments in Nigeria and economic objective that
they expected in influence.
The are
as follows:
1.
This work is set out to instigate the major causes
of inflation in Nigeria
during 1990s
2.
To investigate if not in the achievement of its
efficient objective of the economy and inflation control in particular.
3.
To see if the non-validation of the economic
objective is due to chosen instrument or in appropriate application of the
instrument.
4.
To recommend policy sudation based on the above
findings.
The
policy recommendation based on the above findings will be used as a quite in
the further application of monetary policy or policies.
1.4
SIGNIFICANCE
OF THE STUDY
Since
inflation guises when aggregate demand exceed aggregate comely, we shall focus
our attention at examination of aggregate.
BALANCE OF PAYMENT
This is a double entry statement of
account which reveals the directness of various transactions in god. Decides and a capital flows between residents
of one country and those of the rest of the waded.
ECONOMIC
GROWTHS: An increase in the production of a nation area.
INTEREST
RATE: The cost of credit.
Money
supply: used as is used for the purpose of this research and as defined as the
currency with non bank public © plus privates sector demand deposits the other
definition of money support (M2) is that which incorporation both persuasive
demand and stone of value in (M1) this is technical defined as follows
M2 = 1 = +
daring deposit (SO) + time deposit (TO)
GENERAL
PRICE LEVEL: the overall prices of good and services usually measure with
consumers price methods.
(CPI).
the CPI MEASURE THE RISE ON fall in the
general level.
1.5
LIMITATIONS
OF THE STUDY
The
limitation of the study centime ground the time limit which this study has to
be completed is little more than three (3) months these limitation not
withstanding the researcher has
COST –
PUSH INFLATION: Conditions general rise in price causes of production costs.
HYPER
INFLATION: Situation where prices are arising with little or no increase in
output.
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