Abstract

This study investigates the impact of inflation on economic growth in Nigeria. The study employs the Autoregressive Distributed Lag (ARDL) model on the selected variables that are GDP, inflation, interest rate, money supply and government consumption expenditure from 1990-2020 (31 years). The findings from ARDL model reveal that inflation, interest rate and money supply exert significant negative impact on economic growth while government consumption expenditure exerts significant positive impact on the economic growth. Based on the findings, a more aggressive effort is needed by the government and monetary authorities to tackle the inflation and interest rate fluctuations to forestall the negative impact on the economic growth by ensuring their appropriate rates that will stimulate economic growth. Also the study recommends that government should ensure an appropriate level of money supply that will keep appropriate level of interest rate to avoid plunging the economy into liquidity trap to achieve an intrusive economic growth.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call