EMPIRICAL ANALYSIS OF THE RELATIONSHIP BETWEEN INFLATION AND GOVERNMENT EXPENDITURE IN NIGERIA (1980-2009)

ABSTRACT

This study is to empirically analyze the relationship between inflation and government expenditure in Nigeria for the sample period 1980-2009. The researcher adopted the simple linear regression of the ordinary least square (OLS) techniques to estimate the impact of inflation on government expenditure. The study reveals that government expenditure in a highly significant variable causing inflation in Nigeria, and that as it increases inflationary process in Nigeria also increases. The R2 values in considerably high, as much as 96.0 percent. This means is that government expenditure influences about 96.0 percent of the variability of the inflationary process in Nigeria. The Durbin-Watson value of 1.0134 reveals the existence of positive autocorrelation. The researcher therefore recommends that (1) Government should concentrate more on produce investment, which will have the tendency of the inflationary pressure accompanying such expenditure, and (2) that government should continue to embark on inflation targeting as a means of cushioning the inflationary pressure.

TABLE OF CONTENT

Title page

Approval

Dedication

Acknowledgment

Table of content

Abstract

CHAPTER ONE: Introduction

1.1

Background of the Study

1.2

Statement of the Problem

1.3

Objective of the Study

1.4

Hypothesis of the Study

1.5

Significance of the Study

1.6

Scope of the Study

1.7

Definition of some terms

CHAPTER TWO

2.1

Literature review

2.1.1

Theories of inflation

2.1.2

The Keynesian excess demand theory

2.1.3

The Monetary theory of inflation

2.1.4

The cost-push theory

2.1.

Causes of inflation 

2.2

Cause of inflation of Nigeria

2.3

Government expenditure and inflation

CHAPTER THREE

3.1

Research methodology and design 

3.2

Model Specification

3.3

Source of Data

3.4

Procedure for Data Analysis

CHAPTER FOUR:

Presentation and Analysis of Empirical Result  

4.1

The Presentation empirical result 

4.2

Regression model

4.3

Testing t
he hypothesis using t-statistic 

Chapter five

5.1

Summary of Findings, Conclusion and Recommendations

5.2

Summary of Finding

5.3

Conclusion

5.4

Recommendation

Bibliography

Appendix A

Appendix B

A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ECONOMICS,

FACULTY OF SOCIAL SCIENCE,

EBONYI STATE UNIVERSITY, ABAKALIKI

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF BACHELOR OF SCIENCE DEGREE (B.SC) IN ECONOMICS.

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