THE IMPACT OF INFLATION ON THE GROWTH OF NIGERIA ECONOMY
Abstract
The paper presents an analysis of the impact of inflation on growth in Nigerian economy, using annual time-series dataset for the period of 1981-2012. It has been argued that inflation is an unavoidable phenomenon in the face of economic growth which adversely affects investment decisions in Nigeria. That is why over the years there had been a long standing conventional wisdom that inflation impedes economic growth and growth of investment. The stationary and normal techniques were adopted to examine the data in order to determine if there exists a long-run relationship among the variables. Also, using OLS regression technique, the empirical findings revealed an inverse significance relationship between inflation and economic growth in Nigeria. These findings revealed a significant relationship between inflation and economic growth in Nigeria. These findings recommend among others, exchange policy to bridge investment gap in Nigeria.
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