Managing Inflation in Nigeria: Challenges and Prospects
Journal Title: International Journal of Empirical Finance - Year 2015, Vol 4, Issue 6
Abstract
There appears to be a consensus that macroeconomic stability defined as low inflation is negatively related to economic growth. Hence, rapid output growth and low inflation are the most common objectives of macroeconomic policy. Some scholars concur that inflation may also reduce a country’s international competitiveness, by making its exports relatively more expensive, thus impacting negatively on the balance of payment, in addition to reducing capital accumulation and productivity growth. This research work is to examine the reasons of inflation and economic growth in Nigeria showing how inflation can affect every sector in the economy, to identify the causes and examine the pattern of managing inflation in Nigeria. The secondary data was employed for this work. The ordinary least square (OLS) criterion was adopted in determining the relationship between the Dependent and independent variables, using the E-view, A two model equation were adopted in this research work. However the results from the regression model R2 adjusted is 0.950, which implies that 95.5% of the total variation of real Gross Domestic Product (GDP) can be attributed to the specified explanatory variables, while 0.5% is attributed to the variation of the independent variable, also the R2 is 0.69, which implies that 69% of the total variation of inflation rate can be attributed to the specified explanatory variables, while 31% is attributed to the independent variable. The R2 - adjusted is 0.694 which implies -86% variation in the inflation rate is caused by the variation of the explanatory variables. The study concludes that, government should include policies that will protect and cover every sector in the economy, this will stand as a yardstick for measuring performance of each sector, and inflation will also be checked alongside with performance. Firms may have to devote more resources to dealing with the effects of inflation also. The paper recommends that effective monetary and fiscal policies via efficient tax administration ought to be employed in order to stem this tide since inflation is caused by the excess money supply, some of the monetary and fiscal policy instrument will have little effect in controlling inflation.
Authors and Affiliations
Anochie Uzoma C. , Ude Damian Kalu, Opara Godstime I.
Keywords
Related Articles
- EP ID EP27214
- DOI -
- Views 479
- Downloads 12
Neural Network and Audit Fees: A Heuristic Onset
This paper proposes a methodological approach to evaluate the determinants of audit fees by utilising Neural Networks. First, the application of NN is briefly discussed within areas of financial management; second, a m...
Impact of Advertisement Expenditure on Banks’ Performance in Ghana
The ever- growing competitions in today’s business environment creates dynamic challenges to firm. Today, advertisements are going international at a much faster speed leading to a universal response to advertisement,...
Impact of Capital Structure on Profitability of Commercial Banks Listed on Karachi Stock Exchange
This study investigates the impact of capital structure on the profitability of Pakistan commercial banks listed on Karachi Stock Exchange (KSE) by applying fixed and random effects on panel data of 15 listed Commercia...
The Incentive Effect of Regulatory Capitals Requirement: Empirical Evidence from Nigeria
The divergence of opinion between policy makers and academic researchers, as to which of the first two capital requirements (Tier 1 and 2 capitals)exerts more influence on the attitude of banks towards risk, has led to...
Credit Evaluation of Accepted Companies in Tehran Stock Exchange Using Topsis-Fuzzy Technique
The lack of having a proper tool for evaluating companies’ ability in paying debts is a reason which creates problem for managing credit risk. This study introduces Topsis technique for evaluating the risk of not payin...