EMPIRICAL ANALYSIS OF THE CAUSES AND EFFECTS OF INFLATION IN NIGERIA

Abstract

This research work examined the causes and effects of inflation in Nigeria between 1969 and 2009 and what could be done to ameliorate the negative effects on the economy.  The time series variables properties on some selected variables were examined using Augmented Dickey Fuller (ADF) Unit root test and co-integration analysis.  The result revealed that the explanatory variables (money supply, growth rates, gross domestic product growth rates and expenditure revenue ratio) are not spurious but exchange rate of dollar to naira was non-stationary. The study also revealed that the gross domestic product growth rate is counter inflationary as against inflationary factors.

Keywords:  Inflation, Growth Rate, Economic Variables, Inflation Effects, Unit Root, Exchange Rates,

Money Supply