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11. MODELING THE IMPACT OF INFLATION FACTORS ON ECONOMIC GROWTH IN NIGERIA USING NO DETERMINISTIC TREND AND QUADRATIC TREND ASSUMPTIONS by F. M. Mukhtar, H.G. Dikko and S. I. Doguwa
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MODELING THE IMPACT OF INFLATION FACTORS ON ECONOMIC GROWTH IN NIGERIA USING NO DETERMINISTIC TREND AND QUADRATIC TREND ASSUMPTIONS

F. M. Mukhtar1, H.G. Dikko2 and S. I. Doguwa3

Department of Computer/Statistics Federal College of Agricultural Produced Technology, Kano

Department of Statistics, Ahmadu Bello University, Zaria, Nigeria.

Abstract

This study worked on modeling the impact of Inflation factors on Economic Growth in Nigeria using no deterministic trend and Quadratic trends assumptions. The problem of Inflation in the growth of many nations is never be overemphasized because inflation is the determinant factor. This study model the factors of inflation using factors such as money supply, interest rate, and exchange rate. Quarterly data from the period of 2003 to 2018 were used for this study which was obtained from the Central Bank of Nigeria. The summary statistic of the study variables was Real Gross Domestic Product (RGDP), Inflation rate, exchange rate, interest rate, and money supply. The Jarque-Bera probability values show that RGDP, EXCR INFLATOR variables were normally distribution at 5% except INTR and M2. The ADF test shows that all the variables were stationary at first difference. The results for the Johansen test for Cointegration were estimated to determine the multivariate time series models to be used and from the result of the Johansen test for Cointegration shows evident of Error Correction Model. The Error Correction Model was estimated due to the no spurious regression of the Cointegration indication. The coefficient shows a negative relationship and the impulse response of RGDP shows that Inflation rate, Exchange rate, and Interest rate behavior negatively to RGDP.

Keywords: Growth domestic product, Inflation, Exchange rate, interest rate & money supply

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