The Study empirically examined the impact of monetary policy on selected macroeconomics variables such as gross domestic product, inflation, and balance of payment in Nigeria from (1980-2011).Data were extracted from the Central Bank Statistical Bulletin. Monetary policies played an indispensable role in Nigeria’s economy by regulating and stabilizing the volume of money in circulation in order to create an enabling environment for investment, which will foster economic development. Today, the impact of monetary policy has wider implication and this arises partly because of proactive measures put in place by CBN to ensure macroeconomic stability in the country. The study is designed in such a way that it is an econometric investigation of the impact of monetary policy on economic growth in Nigeria using such econometric tools like the ordinary least square (OLS) regression analysis. The error correction method is used to ascertain if there is a static long run equilibrium relationship among the explanatory variables and subsequently derive an adequate dynamic model of the short run relationship. The study shows that the provision of investment friendly environment in the Nigerian economy will increase the growth rate of GDP.
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