ANALYSIS OF STRUCTURAL TOOLS ON THE EFFECT OF GDP AND INFLATION RATE ON NIGERIA ECONOMY

AYODELE ABRAHAM AGBOLUAJE

Abstract


 


ABSTRACT

This paper is on analysis of Structural tools on the effect of GDP and Inflation Rate on Nigeria economy, using the tools to show relationship between the variables. Results of the analyses show that Granger Causality test shows that per capita GDP do not granger-cause inflation rate and nominal GDP is significant and can be rejected at the 5% level of significant by implication this means that a rise in per capita GDP is a signal of economic growth but the rise is very slow not growing. In impulse response:  Third column indicates that a rise in per capita GDP signals growth in the economy but only in the first four periods but from periods four to twenty which is stagnant affect the economic growth over the period under study. In addition, forecast error variances; innovations in per capita GDP contributed little to explain the variation of nominal GDP and inflation rate this means that the economic growth rate is very slow. Hence, in conclusion the tools of investigating the effect of economic growth rate agree.

KEYWORDS: Granger Causality, Impulse Response and Forecast Error Variance Decomposition, Per Capita GDP, Nominal GDP and Inflation Rate

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References


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ISSN : 2251-1563