MONETARY POLICY INSTRUMENTS AND THE ROLE OF STOCK MARKET PRICES IN THE TRANSMISSION MECHANISM IN NIGERIA

MONETARY POLICY INSTRUMENTS AND THE ROLE OF STOCK MARKET PRICES IN THE TRANSMISSION MECHANISM IN NIGERIA

Author by Dr. Oladapo Gbenga Awolaja

Journal/Publisher: Babcock Journal Of Management And Social Sciences

Volume/Edition: 8

Language: English

Pages: 319 - 332

Abstract

This paper surveys the transmission mechanism of monetary policy beyond the credit and interest rate channels that have been documented by literature to be significant for Nigeria by looking at the role of stock market prices. The paper highlights the important relationship between financial market development and the monetary policy instruments. Furthermore it outlines how monetary policy actions operate through stock market prices to affect the economy. Findings from the impulse response and variance decomposition analyses reveal that the effect of monetary policy actions in Nigeria can be traced through stock market prices


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