IMPACT OF MONETARY POLICY ON UNEMPLOYMENT RATE IN NIGERIA
Abstract
This research work examined the impact of monetary policy on unemployment rate in Nigeria. The study utilized data sourced from the World Bank(World Development Indicators) and CBN Statistical Bulletin for the period 1991-2025, and the autoregressive distributed lag model (ARDL) method was used for the analysis. Result from the study indicated there is significant positive relationship between money Supply (MS), exchange Rate (EXCR), and inflation rate (INFR) in Nigeria, while a negative and significant relationship was found between treasury Bills (TRB) and unemployment Rate (UNR). The model passed all the diagnostic tests for normality, heteroskedasticity, serial Correlation, model specification and stability. Similarly, the speed adjustment of the model is slow as the coefficient of the cointegration equation is 3% (-0.032592). The study concluded that there is positive relationship between monetary policy and unemployment in Nigeria. Thus, this study recommended that the Central Bank of Nigeria (CBN) should adopt a balanced approach to money supply management, ensuring that monetary expansion is directed toward productive sectors that can generate employment.
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