Demand for money in Nigeria: The effect of The Expanding Stock Market

Demand for Money has attracted the interest of great Economist. From Irving Fisher to John Maynard Keynes,William Baumol, James Tobin,Milton Friedman etc.The study of the Demand for Money is not restricted to one market, but related to several markets(Money Market, Capital Market,Foreign Exchange Market etc),hence it has a direct bearing on monetary policy and so relevant to the study of Macro Economics. In Nigeria, the study of the Demand for Money gained prominence in the 1970's with the great debate known as the ''TATTOO Debate'', on the stability of Demand for Money function and whether income is the significant determinant of Demand for Money in nigeria. Over time,the development of global financial markets offered alternatives to holding cash which means the canonical specification of the Demand for Money needs to be improved. In Nigeria, Economic reforms at the turn of the 21st century has improved private sector performance and increased capitalization of the Nigerian stock market.This means stock market variables can no longer be ignored in modelling Demand for Money in Nigeria. This study examines the Demand for Money with particular reference to the Nigerian stock market.