This study is designed to empirically analyze the effectiveness of monetary policy as a tool for controlling inflation in Nigeria.
To investigate on this, hypothesis were formulated as follows:
- Ho: Monetary policy measures adopted over the years have no significant impact in inflation control in Nigeria.
- Hi: Monetary policy measures adopted over the years have significant impact on inflation control in Nigeria.
The researcher adopted the method of linear regression, the ordinary least square (OLS) technique in analyzing the secondary data of inflation rate and money supply (1980-2004). The researcher were further subjected to t-ratio and f-tests, the result of which confirmed.
- Monetary policy measures adopted by the monetary authorities between 1980 and 2004 were not effective and had no significant impact in controlling inflation.
- Quick monetary remedies for inflation control do not exist.
Based on the above findings, the following are the policy recommended:
- The elimination of inflation requires the eradication of inflationary expectation.
- Government should concentrate more on productive investment, which will reduce inflationary pressure in Nigeria.
- The monetary authorities should maintain vigilance in its efforts to keep inflation in check by adhering to effective monetary and fiscal policies.
- Government should monitor the implementation of monetary policies to ensure its success.
- It is believed that if the monetary authorities follows the above recommendation, effective will be achieved.