Finance

Bayesian probability

Channel (broadcasting)

Interest rate channel

Computer network

Macroeconomics

Monetary policy

Econometrics

Inflation targeting

Artificial intelligence

Management

Economics

Transmission channel

Computer science

Monetary economics

Credit channel

Dynamic stochastic general equilibrium

Transmission (telecommunications)

Telecommunications

Estimation

Journal of African Business

The study examines the effect of financial development on the effectiveness of monetary policy transmission channels in Nigeria by estimating a sticky-price DSGE model using Bayesian estimation approach. Four major transmission channels are considered due to the economic and financial conditions of Nigeria. The study employs quarterly data from 2004:1 to 2016:4 and data are sourced from World Development Indicator (online version). Results show that financial development in the period under study has positive effect on monetary policy transmission channel. While credit channel is the most active channel in stimulating output, expectation channel is the most active in stabilizing prices.

Financial Development and the Effectiveness of Monetary Policy Channels in Nigeria: A DSGE Approach