Wasn't going to say this because we definately DON'T need another agency in Nigeria.
But inflation is generally higher in countries whose central banks are responsible for both Prudential policy and monetary policy.
But inflation is generally higher in countries whose central banks are responsible for both Prudential policy and monetary policy.
https://twitter.com/iaboyeji/status/1445511109469872129
But it's important to remember that monetary policy is countercyclical, but prudential policy is procyclical.
If you are really interested then Goodhart and Schoenmaker,1993 make this point better than I can.
If you are really interested then Goodhart and Schoenmaker,1993 make this point better than I can.
But I still talk about it on a slide in my lecture series where I focus on the relationship between central bank as LOLR (Lender of last resort) and monetary policy.
Watch here:
Watch here:
I didn't make this point in my earlier thread because
1. Nigeria isn't currently experiencing a banking crisis
2. Economists e.g Peek et al (1999) still debate this.
But it's still interesting to think about.
1. Nigeria isn't currently experiencing a banking crisis
2. Economists e.g Peek et al (1999) still debate this.
But it's still interesting to think about.
Empirical evidence indicates that whether the responsibilities of monetary policy and Prudential policy are joined, as it in Nigeria's case, or separate like in America, affects implementation. And therefore control of inflation.
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