Effect of Money Supply on Investment Growth in Nigeria

Money supply is a very delicate variable, it is critical to government policy and significant instrument of monetary policy. Thus its expansion or contraction influences the growth in investment and output of any economy. There is a huge variation in the views of economists regarding the effect of money supply on investment and economic growth. The study was aimed at determining the effect of money supply on private sector investment in Nigeria. The reporting structure of the study includes a five section presentation beginning with an introduction outlining the context of money supply and investment growth. Section two presented a comprehensive review of relevant literatures with a major focus on three key components: growth models, investment models and monetary policy. Empirical literature reviews of some authors were also presented here. In section three, the methodological approach of the study was presented. A retrospective economic evaluation study design was adopted. It was concluded that money supply has significant effect on economic activities of Nigerian economy, but moderate supply is needed to stimulate private investments.