The Keynesian framework for the transmission of monetary policy to real sectors of the economy proposes that changes in the cost of capital will lead to changes in investment culminating to a change in output measured in GDP. Conventionally, a reduction in interest rate will all things being...

The interest rate channel of monetary transmission is the link through which variations in Central Bank real interest rates influence aggregate output and prices. To check fluctuation in prices, the Central Bank of Nigeria has kept the monetary policy rate stable at 12 percent for the past three...