EFFECT OF UNEMPLOYMENT AND INFLATION ON ECONOMIC GROWTH IN NIGERIA

Miftahu Idris

Abstract


The instability of unemployment and inflation has attracted the attention of policymakers especially on how to maintain low and stable unemployment as well as relatively stable prices so as to achieve high economic growth. However, it appears that government intervention has not been able to cure the ills in the Nigerian economy. In order words, full potentials of labour-surplus have not been fully exploited. In view of the aforementioned, this study investigates the effect of unemployment and inflation on economic growth in Nigeria using annual time series data covering the period of 1986 to 2020. To examine the model coefficient, ordinary least square technique is employed. Findings indicate that the coefficient of unemployment has a negative and significant effect on economic growth in Nigeria; while inflation exerts a positive effect. The nature of unemployment and inflation characterizing the Nigerian economy are structural and cost-push respectively; hence the need by the government and relevant agencies to formulate policies to encourage self- employment and reduce cost of doing business so as to achieve a high, rapid and sustainable economic growth.


Keywords


Unemployment, Inflation, Economic growth, Ordinary least square

Full Text:

PDF

References


Adamson, Y.K. (2000). Structural Disequilibrium and Inflation in Nigeria: A Theoretical and Empirical Analysis. Centre for Economic Research on Africa. New Jersey 07043: Montclair State University, Upper Montclair.

Adofu, I. (2010), Accelerating Economic Growth in Nigeria, The role of Foreign Direct Investment. Current Research Journal of Economic Theory. Vol. 2(1), pp11-15.

Akintoye I. R. (2008) Reducing Unemployment through the Informal Sector: A Case Study of Nigeria. European Journal of Economics, Finance and Administrative Sciences. Issue 11.

Akomolafe C. O. and Adegun, O. A. (2009) Strategies of managing higher education for youth labour market in Nigeria. International NGO Journal. 4(10), pp. 456-460.

Aminu, U. and Anono, A.Z. (2012). An empirical Analysis of the Relationship between Unemployment and Inflation in Nigeria from 1977-2009. Business Journal, Economics and Review, Vol.1 (12), pp 42-61. Global Research Society. Pakistan.

Aminu, U. and Anono, A.Z. (2012). Effect of Inflation on the Growth and Development of the Nigerian Economy (An Empirical Analysis). International Journal of Business and Social Science. Vol.3 No.10 [Special Issue- May 2012].

Aminu, U. and Manu, D. and Salihu, M. (2013). An Empirical Investigation into the Effect of Unemployment and Inflation on the Growth in Nigerian. Interdisplinary Journal of Research in Business. Vol.2 Issue.12

Ayesha, W. and K. Rukhsana (2010) The Impact of Inflation and Economic Growth on Unemployment: Time series Evidence from Pakistan. Proceedings of 3rd international Conference on Business Management (ISBN: 978-969-9368-07- 3).

Bakare, A.S. (2012) Stabilization policy, Unemployment Crises and Economic Growth in Nigeria. Universal Journal of Management and Social Sciences.Vol.2, No.4.

Batini, N. (2004) Achieving and Maintaining Price Stability in Nigeria. International Monetary Fund Working Paper. No. WP/04/97,pp, 1-39.

Central Bank Nigeria (2011) Communique No. 78 of the Monetary Policy Committee Meeting, Septembr.

Central Bank of Nigeria (2008) Annual Report and Financial Statement for the Year Ended 31st December. Abuja: Central Bank of Nigeria.Central Bank of Nigeria (2011) Annual Report. ISSN: 1597-2976, PP 263.

Chang-shuai, L. and Zi-juan, L. (2012). The relationship among Chinese unemployment rate, Economic growth and Inflation. Advances in Applied Economics and Finance, Vol.1, No.1.World science Publishers. United states.

Dauda, R.S. (2010) Investment in Education and Economic Growth in Nigeria: An empirical Evidence. International Research Journal of Finance and Economics. Issue 55.

Dernberg, and McDougal, (1976) The Evolution of Macroeconomic Theory and Implication for Growth. MC Graw Hill, New York.

Emeka, C. (2013) Nigeria’s economy; inflation and other economic indicators. strategist@afripol.org.

Fakhri, H. (2011) Relationship between Inflation and Economic Growth in Azerbaijani Economy: Is there any threshold effect? Asian Journal of Business and Management Sciences Vol.1 (1).

Fakiyesi, O.M. (1996) Further Empirical Analysis of Inflation in Nigeria. CBN Economic and Financial Review.34(1), March.

Faraji, K. and Kenani, M. (2011) Impact of Inflation on Economic Growth: A Case study of Tanzania. Asian Journal of Empirical Research, Vol. 3 (4):pp363- 380.

Garba, A. S. (2010) Refocusing Education System towards Entrepreneurship Development in Nigeria: a Tool for Poverty Eradication. European Journal of Social Sciences. 15(1), pp. 140-150.

Innocent, C.O., Nkechinyere, C.U., Ebele, N.and Geraldine, N. (2012), Economic Growth and Foreign Direct Investment in Nigeria: An Empirical Investigation. Journal of Economics and Sustainable Development.ISSN : 2222-1700, Vol.3(13).

Joao, R.F. and Francisco, F.G. (2001), Does High Inflation Affect Growth in the Long and Short Run?. Journal of Applied Economics, Vol.4, No.1, pp:89-105

Kakwagh, V. V. and Ikwuba, A. (2010) Youth Unemployment in Nigeria: Causes and Related Issues. Canadian Social Science. 6 (4), pp. 231-237.

Mohsin, S. K. and Abdelhak, S. S. (2001). Threshold effects in the Relationship between Inflation and Growth‟‟. IMF Staff Papers Vol. 48(1).

Popovic, G. and Popovic, J. (2009) Inflation and Unemployment in the EU: Comparative Analysis of Phillips Regularity.UDK 336.748.12, 331.56

Rafindadi, A.S. (2012) Macroeconomic Policy, Output and Unemployment Dynamics in Nigeria: Is There Evidence of Jobless Growth? Paper presented at the 53th Annual conference of the Nigerian economic society on Youth Employment and Poverty Reduction in Nigeria. NICON Luxury Hotel, Abuja.

Vikesh, G. and Subriana, H. (2004). Relationship Between Inflation and Economic Growth. Working Paper, Reserve Bank of Fiji.Suva Fiji.

Williams, O. and Adedeji, O.S. (2004). ‟Inflation Dynamics in the Dominican Republic. IMF Working Paper, WP/04/29, Western Hemisphere Department: Washington, D.C., February.


Refbacks

  • There are currently no refbacks.


 

 

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.