ABSTRACT
This study is
focused on relationship between inflation and economic growth in Nigeria. In an
attempt to examine the influence of inflation on the growth prospects of the
Nigerian economy, the study employs descriptive field survey as research
design. The sample size was 242 and adopted the simple frequency and percentage
table analysis. The study findings indicate that inflation and real exchange
rate exert a significant negative impact on economic growth, while interest
rate and money supply indicate a positive and significant impact on economic
growth. Other variables in the model depict no influence on the economic growth
of Nigeria. The causality result shows the unidirectional relationships between
interest rate, exchange rate, government consumption expenditures and gross
domestic product. However, inflation and the degree of openness show no causal
relationship with gross domestic product. As a result, the study recommends
that a more pragmatic effort is needed by the monetary authorities to target
the inflation vigorously to prevent its adverse effect by ensuring a tolerable
rate that would stimulate the economic growth of Nigeria.
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