The Effects of Money Supply on Interest Rates
Student: Ahmad Alhassan (Project, 2025)
Department of Economics
Northwest University, Kano, Kano State
Abstract
This thesis work examines the effects of money supply on interest rates in Nigeria from 1970-
2023, by applying the Auto-regressive distributive lag approach. The choice of this period is
to enable us focus strictly on the era of market-based monetary regime in Nigeria. The results
confirm a negative effect of money supply on interest rates. This result relies on the liquidity
frame theory. While, fiscal deficits indicated a positive relation with interest rate. The
granger causality indicated a bilateral relation between money supply and interest rate. It is
recommended that for government to stimulate investment for economic growth, they should
reduce interest rate by expanding money supply. The government should also discouraged
unnecessary spending to bring down interest rate. Moreover, where deficit financing is
inevitable, it should be put into productive activities in order to create more employment
opportunities, raise national output, and increase the living standard of the people.
Keywords
For the full publication, please contact the author directly at: ahmadalhassanaga@gmail.com
Filters
Institutions
- Mohammed Lawan College of Agriculture, Maiduguri, Borno State 12
- Moshood Abiola Polytechnic, Abeokuta, Ogun State 7
- Nasarawa State University, Keffi, Nasarawa State 8
- Niger Delta University, Wilberforce Island, Bayelsa State 28
- Niger State College of Education, Minna, (Affl To Usmanu Danfodiyo Uni, Sokoto) 1
- Nigeria Maritime University, Okerenkoko, Delta State 1
- Nigerian Army University, Biu, Borno State 3
- Nile University of Nigeria, Abuja 3
- Nnamdi Azikiwe University, Awka, Anambra State 98
- Northwest University, Kano, Kano State 178