ABSTRACT

This study we have thus far examined the effect of inflation on economic growth in Nigeria from 1981 to 2015. The study employed the OLS estimation technique period the following were result were found; There is no long run relationship between inflation (and other control variables) and economic growth in Nigeria, Inflation has a negative and significant effect on real economic growth in Nigeria, Exchange rate has a negative and insignificant effect of real economic growth in Nigeria. There is no causal relationship between economic growth, inflation and exchange rate in Nigeria. These results have important policy implications for both domestic policy makers and development partners, implying that controlling inflation is a necessary condition for promoting economic growth. Thus, policy makers should focus on maintaining inflation at a low rate (single digit).