EFFECTS OF ASYMMETRIC MONETARY POLICY ON TARGETING INFLATION AND STABILIZING OUTPUT IN NIGERIA
- Abubakar Wambai Aminu
- Sule Ya’u Hayewa
- ( paper pages. 127-154 )
Abstract
This paper proposes a non-linear approach to
analysing monetary policy shocks. The Taylor rule is explored using non-linear
techniques, namely the asymmetric vector autoregressive (AVAR) model from
1993Q1 to 2023Q4. The results reveal evidence of asymmetric shocks transmission
among major macroeconomic variables, namely the monetary policy rate, inflation
and the output. The threshold/asymmetric
VAR impulse response functions confirm evidence of asymmetric shocks
transmission among the variables. In particular, the results indicate that the
huger preponderance of the shocks propagation in inflation and output is due to
the changes in the monetary policy rate. This implies that the Central Bank
needs to focus more on keeping inflation at the target level (low and stable)
and, stabilizing the output around the desired trend through choosing an
optimal rate that would help it achieve these macroeconomic targets.
Citation
Abubakar Wambai Aminu, Sule Ya’u Hayewa.
2026.
"EFFECTS OF ASYMMETRIC MONETARY POLICY ON TARGETING INFLATION AND STABILIZING OUTPUT IN NIGERIA"
The Nigerian Journal of Economic and Social Studies,
68 (1): 127-154.
