Abstract:

This study analyses the effects of monetary policy shocks on the economy of Nigeria during the period 1980:Q1-2012:Q4, using the Structural Vector Autoregression (SVAR) technique. Findings from the study reveals that monetary policy innovations carried out on the quantity based nominal anchor, M₂, has the most significant effect on output and prices with a very fast speed of adjustment while other policy variables were insignificant. The study therefore, recommends emphasis on the manipulation of the quantity-based nominal anchor (M₂) for managing the economy.