An Econometric Analysis on the Impact of Inflation on Economic Growth

An Econometric Analysis on the Impact of Inflation on Economic Growth in Nigeria

INTRODUCTION

Maintaining price stability and growth together in an economy is one of the central macroeconomic policy objectives of most developing countries in the world today.

Also, the central objective of macro-economic policies is to foster economic growth and keep inflation on a low level.

In order to promote economic growth and strengthen the purchasing power of the domestic currency for the Nigerian economy, emphasis has been laid by the Central Bank of Nigeria on maintaining stability in prices through the use of expansionary or contractionary monetary policy, (Umaru  & Zubairu 2012).

Inflation according to Hamilton (2015) can be defined as the rise in the level of prices maintained over a given period in an economy.

It can also be seen as a situation where “too much money is chasing too few goods”    In other words, it refers to the general rise in the price of various goods or services thus leading to a fall in the purchasing power of a countries currency, (Lipsey & Chrystal 1995).

Inflation is an economic situation and it occurs where an increase in the supply of money is greater than the amount of goods and services produced in a country, (Piana 2002).

REFERENCE

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

Agenor, P., and Hoffmaister, A.W. (1997).  Money, Wages and Inflation in Middle-Income Developing Countries. IMF Working Paper: WP/97/174.

Ahmed, S., and Mortaza, G. (2005). Inflation and Economic Growth in Bangladesh 1981- 2005. Policy Analysis Unit (PAU) Working Paper 0604.

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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 Global Research Society. Pakistan, 1(12), 42-61.