Theodora Nwanneamaka UWAECHUE

The research examined how monetary policy impacts employment in Nigeria. It used employment as the dependent variable and broad money supply (M2), monetary policy rate (MPR), and inflation rate (INF) as the independent variables. The data spanned from 1991 to 2022. The methods of data analysis employed were the Autoregressive Distributed Lag Model (ARDL), unit root test and co-integration test. The result indicates a long-term relationship among the variables. Specifically, the study found that money supply has a positive and significant impact on employment in the long run, satisfying the a priori expectation. Inflation was found to have both negative short-run and weak positive long-run effects on employment, indicating that high inflation undermines job creation in the short term but may exert mild stimulatory effects over time. Conversely, the monetary policy rate showed no significant effect on employment in both the short and long run, suggesting thatinterest rate adjustments alone do not effectively influence employment outcomes in Nigeria. Based on these findings, the study recommends that policymakers should strengthen monetary expansion policies that increase money supply while ensuring that such measures are complemented by structural reforms to enhance credit access for productive sectors. Inflation management should be prioritized through a balanced mix of monetary and fiscal strategies to reduce its adverse short-run effects on job creation. Additionally, interest rate policies should be complemented with targeted employment and investment programs to improve the responsiveness of the labor market to monetary interventions. The research examined how monetary policy impacts employment in Nigeria. It used employment as the dependent variable and broad money supply (M2), monetary policy rate (MPR), and inflation rate (INF) as the independent variables. The data spanned from 1991 to 2022. The methods of data analysis employed were the
Autoregressive Distributed Lag Model (ARDL), unit root test and co-integration test. The result indicates a long-term relationship among the variables. Specifically, the study found that money supply has a positive and significant impact on employment
in the long run, satisfying the a priori expectation. Inflation was found to have both negative short-run and weak positive long-run effects on employment, indicating that high inflation undermines job creation in the short term but may exert mild
stimulatory effects over time. Conversely, the monetary policy rate showed no significant effect on employment in both the short and long run, suggesting that interest rate adjustments alone do not effectively influence employment outcomes in Nigeria. Based on these findings, the study recommends that policymakers should strengthen monetary expansion policies that increase money supply while ensuring that such measures are complemented by structural reforms to enhance credit access for productive sectors. Inflation management should be prioritized through a balanced mix of monetary and fiscal strategies to reduce its adverse short-run effects on job creation. Additionally, interest rate policies should be complemented with targeted employment and investment programs to improve the responsiveness of the labor market to monetary interventions.