CAUSES AND EFFECT AND SOLUTION TO INFLATION IN NIGERIA
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Abstract
The study examines the impact of inflation on economic growth of Nigeria. Other micro economic variable tested along with inflation in this study are Agriculture, manufacturing, and trade. In analyzing the data the simple percentage method was applied the empirical results demonstrated that there is a positive relationship between the dependent variable (agriculture and trade) and explanatory variable except in manufacturing.
The relationship between inflation and economic growth is one, which many economists have watched with keen interest. Producers in the production sector cash on this phenomenon to make a brisk business sat the expense of fixed income earners. This informs the increase in turnover in inflationary periods. Money economy gave rise to inflation, which reduces the living standard of the people and the level of saving dwindles in turn. The effect on economic growth is dependent on the level of economic activity going on. If there are more producers, there are likely to be an increase in the level of economic growth vice versa.
In all, inflation do not wish any economy well, so should be eradicated by a deliberate effort. Nigeria has intellectuals that are capable of formulating good monetary and fiscal policies that will benefit her.
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