Monetary Policy and Household Consumption Expenditure in Nigeria. An Auto-regressive Distributed Lag (ARDL) Approach
DOI:
https://doi.org/10.51699/cajitmf.v5i1.1364Keywords:
Household, consumption, expenditure, credit reserve ratio, liquidity ratioAbstract
The study investigates monetary policy and household consumption expenditure in Nigeria from 1980-2023. The study used variables like household consumption expenditure, credit reserve ratio, liquidity ratio, monetary policy rate, minimum rediscount ratio, open market operation and treasury bill. The study utilized the descriptive statistics, unit root test, co-integration test and Autoregressive Distributed Lag (ARDL) test. The result reveals that all the variables signposted negative relationship with Household consumption expenditure (HCD) and statistically significant at 5 percent level of significance. The study miens at monetary policy and household consumption expenditure in Nigeria using ARDL method and the study concludes that there is a significant impact of monetary policy on consumption expenditure in Nigeria especially since all variables seem to appear statistically significant at 5 % level of significance. The study variables had negative impact of credit reserve ratio (CRR), open market operation (OMO), liquidity ratio (LQR), Treasury bills (TRB), monetary policy rate and minimum rediscount ratio on consumption expenditure and this implies that they significantly reduces household consumption expenditure in Nigeria but they are all statistically significant at 5% level of significance in Nigeria.
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