Uncertainty of Output Gap and Monetary policy Making in Nigeria

A major challenge of monetary policy is the attainment of sustainable output level but in setting the optimal monetary policy rate information of the output gap but how uncertainty of the gap affects the path of monetary policy rate is crucial for policy use. The investigation of this phenomenon in Nigeria was mostly concerned with how monetary policy affects output. In view of the dearth of studies on uncertainty and monetary policy in Nigeria, this paper investigates the effect of output gap uncertainty on monetary policy rate in Nigeria-1991Q1-2014Q4. The paper relies on the New Keynesian economics and employs the GARCH-GMM econometric technique for analyses. Evidence from the study shows that real output gap and inflation uncertainty are statistically significant with estimated values of        respectively. The coefficient of the real output variable is significant with a coefficient estimate of    while we found no strong evidence to support the effect of inflation on monetary policy rate.  The inference from our findings is that monetary policy is less responsive to uncertainty of real output gap. We therefore recommend that the Central Bank of Nigeria should consider uncertainty of both inflation and output variables when setting the policy rate.&nbsp

Wpływ popytu na pieniądz na bilans handlowy w Nigerii

Previous studies appear to have concentrated on the effects of currency depreciation on trade balance and macroeconomic policy, while the relationship between money demand and trade balance is scantly documented in the literature. This paper therefore examines the effects of money demand on trade balance in Nigeria. For the analysis conducted, annual time series data covering the period ranging from 1986 to 2018 were used along with the Autoregressive Distributed Lag (ARDL) estimation technique. The long‑run coefficient of money demand was positively signed and statistically significant at 5% level. The positive relationship exhibited by the coefficient of money demand in the long run had a significant influence on trade balance. Thus, this implied that a unit percent increase in money demand would lead to a 1.57% significant increase in trade balance. The implication of this finding was that money demand had significantly influenced trade balance, enhancing the production of goods and fostering investment, which had led to increased growth. The paper recommends that the Central Bank of Nigeria through the Monetary Policy Committee should amend qualitative and quantitative credit control policies with the aim of improving lending to enhance the flow of credit to the real and exporting sector of the economy in order to bring about the desired effect on trade balance. However, the study is limited to an analysis of the existence of the relationship between money demand and trade balance using the Nigerian data set.Prowadzone przez różnych autorów badania koncentrują się na wpływie deprecjacji waluty na bilans handlowy oraz politykę makroekonomiczną, podczas gdy związek między popytem na pieniądz a bilansem handlowym jest słabo udokumentowany w literaturze. W niniejszym artykule przeanalizowano wpływ popytu na pieniądz na bilans handlowy w Nigerii. Do analizy wykorzystano szeregi czasowe dla danych rocznych z okresu od 1986 do 2018 roku oraz autoregresyjny model o rozłożonych opóźnieniach (ARDL). Długookresowy współczynnik popytu na pieniądz miał znak dodatni i był statystycznie istotny na poziomie 5%. Pozytywne skorelowanie współczynnika popytu na pieniądz w dłuższej perspektywie miało znaczący wpływ na bilans handlowy. Oznaczało to, iż wzrost popytu na pieniądz o 1,57% prowadził do znacznego wzrostu bilansu handlowego o 1,57%. W konsekwencji można stwierdzić, iż popyt na pieniądz miał znaczący wpływ na bilans handlowy, prowadząc do zwiększenia produkcji towarów i promowania inwestycji, co zaowocowało zwiększonym wzrostem. Artykuł zawiera rekomendację, aby Bank Centralny Nigerii, za pośrednictwem Komitetu Polityki Pieniężnej, zmienił jakościową i ilościową politykę kontroli kredytowej tak, żeby usprawnić akcję kredytową i zwiększyć przepływ kredytów do eksportującego sektora gospodarki, w celu uzyskania pożądanego wpływu na bilans handlowy

TAX REVENUE AND WELFARE OF NIGERIANS

Tax system is one of the major sources of government earnings and spending, but non-commitment of eligible tax payers to pay the due taxes, place huge burden on government's responsibility to the citizens. This study investigated the effects of changes in fiscal policy (taxes) on government and citizens welfare in Nigeria from 1986-2020. The period covered is considered significant, because of its time lag and several tax policies and reforms introduced by the government, and its subsequent implementation. This study used an ex-post-facto research design using annual secondary data from accredited sources majorly from Federal Inland Revenue Service (FIRS), and Central Bank of Nigeria (CBN) annual statistical bulletin for the period. Autoregressive Distributed Lag (ARDL), Granger causality test, and Wald bounds test were used to analyze the data. Results revealed a linear long run association among the variables. Thresholds relationship were examined – revealing linear-linear relationship both at the upper and lower regime, this indicates no thresholds relationships. The study concluded that as total tax revenue has a positive insignificant impact on consumption at 11.8%. Therefore, it is recommended amongst others that, to build and maintain the culture of household consumption, there is need for a review and restructure of the nation's tax policy and administrative system by promoting compliance culture developed through taxpayer educatio

Uncertainty of Output Gap and Monetary Policy-Making in Nigeria

This paper investigates the effect of output gap uncertainty on monetary policy rate in Nigeria-1991Q1-2014Q4. A major challenge of monetary policy is the attainment of sustainable output level but in setting the optimal monetary policy rate information about output gap and how uncertainty of the gap affects the path of the monetary policy rate is crucial for policy use. Empirical evidence on this phenomenon in Nigeria has been concerned with how monetary policy affects output while evidence on the response of monetary policy to uncertainty of real output is not indepth. Analythical approach in this paper adopts the Generalised Method of Moments econometric technique