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ABSTRACT
The primary goal of this project is to investigate the impact of inflation on the economic growth of Nigeria. Understanding this relationship is crucial for policymakers and economists to design strategies that foster sustainable economic development in the country.
This study employs the multiple regression model and the Ordinary Least Squares (OLS) method to analyze the relationship between inflation and economic growth. By utilizing historical economic data from Nigeria, the study aims to provide a comprehensive statistical analysis of how inflation influences economic performance both in the short run and the long run. The analysis reveals a complex relationship between inflation and economic growth in Nigeria. In the short run, inflation appears to have a negative impact on economic growth. However, in the long run, the relationship between inflation and economic growth turns positive. Despite these findings, the results are not statistically significant, indicating that inflation alone may not be a strong predictor of economic growth in Nigeria and that other factors may also play a critical role.
This study concludes that while inflation is positively related to the Nigerian economy in the long term, its short-term effects are detrimental. The lack of statistical significance suggests that the relationship between inflation and economic growth is nuanced and potentially influenced by various external and internal factors. These insights highlight the need for comprehensive economic policies that consider the multifaceted nature of inflation's impact on economic growth.
