Effect of Real Economy Predictors on Monetary Policy Responses: Testing Model Fits For OLS, IV and IV-GMM Estimators

Olatunji Shobande

Academic Journal of Economic Studies, 2019, vol. 5, issue 3, 90-96

Abstract: The paper investigates the effect of real economy predictors on domestic monetary policy reaction function in Nigeria over the period of 1983 and 2018, using a quarterly data obtained from the central bank of Nigeria Statistical Bulletin. The evidence is based on the Ordinary Least Square (OLS), Two stages Least Squares (2SLS) and Generalized Method of Moment (GMM) estimators. The findings suggest that inflationary focus is necessary condition, but not sufficient as the welfare implication must also be built into policy reactions. Thus, it recommends that policy discretion towards improving the wellbeing; reduce productivity shocks and ensuring greater policy coordination is urgently required.

Keywords: Monetary policy; Inflation; Productivity; GMM/IV, Nigeria (search for similar items in EconPapers)
JEL-codes: F10 F15 F19 F21 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.ajes.ro/wp-content/uploads/AJES_article_1_273.pdf (application/pdf)
http://www.ajes.ro/wp-content/uploads/AJES_article_1_273.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:khe:scajes:v:5:y:2019:i:3:p:90-96

Access Statistics for this article

More articles in Academic Journal of Economic Studies from Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest Contact information at EDIRC.
Bibliographic data for series maintained by Adi Sava ().