Effects of Monetary Policy Shocks in Nigeria: Evidence from Structural VAR Modeling

  • ADOFU Ilemona Federal University Lafia, Nasarawa state
  • SALAMI Abdulganiyu Federal University Lafia, Nasarawa state
Keywords: Monetary, Policy, Shocks, Macroeconomic, Development,Stability


This paper empirically examines the effects of monetary policy shocks on some selected macro economic variables in Nigeria, over the period of 1983 to 2015. The data used are sourced from Central Bank of Nigeria Bulletin, Nigeria Bureau of Statistics portal and World Bank portal. The paper used structural vector auto regressive technique to model and estimate contemporaneous impactandresponse of interest rate shocks to other macroeconomic variables. Impulseresponse function revealed that interest rate-shock has a negative impact onrealGDP and money supply. It is also observed that inflation rate responds positively to positive shocks in interest rate and money supply, an outstanding contribution to the price puzzle debate in the monetary shock studies. It is therefore recommended that monetary policy authority in Nigeria be more vigilant in fixing interest rate because of its significant effects on other macro economic variables.

Author Biographies

ADOFU Ilemona , Federal University Lafia, Nasarawa state

Department of Economics

SALAMI Abdulganiyu, Federal University Lafia, Nasarawa state

Department of Economics


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