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The Role Of Monetary Policy And It’s Impact On Nigeria Financial System
[A Case Study of Kwara State Polytechnic]
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1.4 SIGNIFICANCE OF THE STUDY.
This research work is important to every sector and everyone within nation. Economists agree that money plays an important role in the economic development and growth process of a nation, ever since the days of an ancient Greek writer-philosophy plato Aristotle and xylophone write dealing with money have dwelt on the issue of monetary policy. Monetary policy involves some process which will bring about the growth of the economic, these are the objective of monetary policy ( the goals of the policy) policy formulation and choice of policy instrument, policy implementation and policy evaluation / adjustment.
All these process will bring about great impact on the activities of the financial institution that helps in the successful execution of the policies through their dealing with general public the introduction of these policy have increase the level of activities in the economy.
1.5 SCOPE OF THE STUDY.
The research work is designed to cover almost all the area of the goals of monetary policy and it is instrument. It will deal with the impact trend, and indicator of various monetary tools been used in Nigeria finance system to the supply of money and cost is Nigeria banking system.
1.6 PLAN OF THE STUDY.
In line with the above discussion, these stages briefly states the outline of the various chapters in the project work in the light of the above, the project shall be divided into five chapters in order to achieve the aim of the project each chapter shall deal with all the important aspect of the topic.
Chapter one of the report will contain the introduction of the project work by giving the background of the study statement of problem of study objective of the study. Significant of the study, scope and limitation of the study and the organization of the study.
Chapter two will focus and deals with review of various literature materials on monetary policy.
Chapter three will focus on the brief history of the regulatory body of monetary policy in Nigeria which is the Central bank of UK and the research methodology used.
Chapter four will analysis stating the information received so far on the monetary that is the review of monetary policy in UK comparision of current year monetary policy with previous year and the impact of monetary policy and UK finance system.
Lastly, chapter five would cover on will be devoted to summary conclusion are recommendation.
Through its influence on aggregate demand and hence on output. This school of thought even argues that a modest rate of growth because it is only in such circumstance that the rate of profit would rise and motivation to invest would increase .
It is further argued that the use of monetary policy to achieve growth can aid achievement of some other objective such as full employment.
The other view on monetary policy is the classical view as defined by Milton, according to this view monetary policy can not be used to achieve a legal unemployment which is lower the natural rate of unemployment. However in an increase in money supply will simply lead to a repetition of the business cycle which clearly show the rate of stabilization in the economy.
BUSINESS CYCLE
Keynesian view is that monetary policy should be directed out interest rates rather than money supply and that monetary policy should at all times be directed at interest rate rather than money supply and that monetary policy should at all times be subsidiary to fiscal.
Policy the monetarists recommend that control of money supply should be major concern of the monetary authority. The Keynesian view says since inflation is a sign of economic over healing and rise in interest rate will tend to cool it down by checking investment and thence overall demand conversely during the period of recession economic activities could be stimulated by lowering the interest rates.
However, Keynesian argue that monetary policy will be more effective if the authorities aim to control interest rate directly rather than indirectly through the monetary supply.
Therefore, the Keynesian versus monetary debate given the conflicting advice to government on the role and effectiveness of monetary policy. According to Paul Einzigg, monetary policy is the attitude of the political authority toward the monetary system of the communicate under the control.
Declaring this definition tool vague to be of sufficient practical use, the same write defined an idea monetary policy as the effort to reduce to a minimum the disadvantages and increase the advantage resulting from the existence and operation of monetary system.
M.C vaish (1981) gave his own definition of monetary policy this is mean/ the central bank of UK control over the supply and cast of money as an instrument for achieving the objective of economic policy of the government.
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