Paper Title :The Implications of Financial Innovations on Money Demand in Nigeria
Author :Thankgod O. Apere
Article Citation :Thankgod O. Apere ,
(2018 ) " The Implications of Financial Innovations on Money Demand in Nigeria " ,
International Journal of Management and Applied Science (IJMAS) ,
pp. 76-84,
Volume-4,Issue-2
Abstract : The demand for money is found to be a major determinant of liquidity preference. This study empirically
investigated financial innovations as it relates to money demand in Nigeria over the period 1981 – 2016. With data sourced
from the Central Bank of Nigeria Statistical Bulletin. The study estimated a VAR model and showed that long-run demand
for real balances in Nigeria depends upon real income on its own interest rate. Also, the empirical analysis showed that
income and interest rate exert influence on money demand, while financial innovations in Nigeria has but little influence on
the demand for money. The result implies that financial innovation is not only an important variable in determining money
demand but that as financial innovation increases it affects the demand for money negatively as individuals gradually move
away from more liquid assets to less liquid assets with growth in new as such decrease in the demand for money. The result
implies that income and interest rate exert influence on money demand, while financial innovations in Nigeria has but little
influence on the demand for money. This study therefore recommends that Government and policy makers should be
thorough in formulating and implementing unpredictable changes in the money demand due to financial innovation which
could lead to misspecification of the money demand; unstable money demand despite its immerse benefits to the economy
such as efficiency and low transaction costs.
Keywords- Financial Innovations, Money Demand, Money Stocks, Monetary Policy
Type : Research paper
Published : Volume-4,Issue-2
DOIONLINE NO - IJMAS-IRAJ-DOIONLINE-10931
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Copyright: © Institute of Research and Journals
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Published on 2018-04-05 |
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