The ability of an economy to support a defined level of economic production indefinitely and the country desire for minimal fluctuations in the macro-economy is a function of government policies and actions policy making institutions. Hence, this study examines the impact of economic policy (monetary policies, fiscal policies and trade policies) on economic stability. With the use ARDL approach to cointegration to analyze data 1981-2016, the study found that economic policy has a significant effect on economic stability therefore the usefulness of economic policy cannot be over-emphasized in the contribution to the Economic stability of the country.
JEL Classification: E50, E62, O22, O24
Keywords: Fiscal policy, Trade policy, Monetary policy, Economic Policy, Economic Stability