Causes of inflation and unemployment in nigeria pdf

The granger causality shows that inflation does not cause economic growth in nigeria, while unemployment and foreign exchange rates cause. This is in line with the phillips hypothesis that an inverse relationship exists between inflation and unemployment. Economic growth and the unemployment rate congressional research service summary a persistently high unemployment rate is of concern to congress for a variety of reasons, including its negative consequences for the economic wellbeing of individuals and its impact on the federal budget. Nigeria has been going through a lot of economic problems in the recent years.

Secondary data obtained from national bureau of statistics, central bank. Unemployment and inflation are two intricately linked economic concepts. Asekunowo1 this study sought to identify the traditional and institutional inflation variables responsible for inflation phenomenon and the magnitude of the contribution of the identified variables to the rise in general price level. Inflation exists when money supply exceeds available goods and services. From this of view of the public inflation causes uncertainty about future prices. For a nation thats not in the region where it snows to be 190 million in population, there just cant be enough jobs, even if. The economics of inflation unemployment and nigerian families. Unemployment in nigeria has resulted in more and more people who do not have purchasing power. Causes, effects and solution of inflation in nigeria myschool.

Find out about the main causes of inflation in nigeria in this article. Nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. The relationship between inflation and unemployment in nigeria. Using time series data spanning forty one years 19702011 which was obtained from the central bank of nigeria cbn statistical bulletin volume 22, and central bank of nigeria. Inflation has a significant negative relationship with unemployment rate in nigeria. Causes, effects, solution and rate of unemployment in nigeria the causes of unemployment are practically what happen in all sectors. The factors responsible for this is due to population increase, increase in workers salaries and. Consequently, a basic thesis of this proposal is that stagflation has caused and will continue to cause considerable hardship for many nigerian.

Other specific objectives are to determine unit root augmented dickey fuller. Our emphasis here is on diagnosis of the causes of inflation and a description of the effects of inflation, not on specific policy recommendations to end inflation. What was noticeable as at then was a temporarily gap between searching for job by graduates and. Inflation is often defined in terms of its supposed causes. Cost push inflation arises from anything that causes the conditions of supply to decrease. Poverty, unemployment and inflation are dreaded global.

Paramount among these measures are monetary and credit policies formulated restore balance of payment to a health. But the situation of monetary expansion or budget deficit may not cause price level to rise. The causes of persistent inflation in nigeria central bank of nigeria. The causes of persistent inflation in nigeria victor o. Inflation and unemployment are destructive rather than helpful to the economic development and growth in nigeria. Timeseries data for the period 1990 2011 were used to examine the impact of inflation on economic growth. For example, in 1998 gdp growth rate was relatively high amidst the.

Unemployment rate in nigeria 2020 and its economic consequences. This paper discusses the challenges of nigerias economy problems, causes and the way forward. Demandpull inflation is caused by an increase in the conditions of demand. Using ols, adf and granger causality, aminu and anono 2012 also studied the effect of inflation on economic growth and development in nigeria. Thereafter, domestic or internal causes like increase government expenditures, raising domestic credit creation and supply, bottlenecks such as shortage of raw materials and. Some of these factors include a rise in the cost of production, an increase in government taxation and a decrease in quantity of foods produced.

More so, low investor confidence due to inflation also discourages them from taking loans from banks. Inflation and reflect a dozen diverse views on one of the nations central economic problems. Inflation has been plaguing the nigeria economy for decades. According to this theory, inflation depends on the level of actual output gdp and natural rate of unemployment. If the economy has overheated, central banksif they are committed to ensuring price stabilitycan implement contractionary policies that rein in. For a nation thats not in the region where it snows to be 190 million in population, there just cant be enough jobs, even if you create 10,000 of it daily. There has been an increase in the growth of the labor forces along with the inadequate supply of jobs. The impact of rapid inflation growth has led the federal government of nigeria to adopt several sexual measures of inflation control. Using agege local government of lagos state as a case study. Unemployment represents the number of people in the work force who want to work but do not have a job. Economic theory explains this relationship in terms of a full employment rate of unemployment, also called the natural rate of unemployment or the nonaccelerating inflation rate of unemployment nairu. Impact of inflation and unemployment on nigeria economic growth 19812017. Final year research project topics, ideas and materials in pdf, doc download for free. According to the empirical findings of this study, as in the philips curve, there is a negative relationship between inflation and unemployment rates in nigeria.

Stress and health problems especially, suffered from those who are not employed, remained one of the economic consequences of unemployment, and when there is unemployment, the people suffer. The relationship between inflation and unemployment in. Effect of inflation on the growth and development of the. It is sad, however, that her resources are not put to efficient use. An analytical study of the impact of inflation on economic. One of the major factors responsible for the high level of unemployment in nigeria is the rapid growth in population. A deficit budget may be financed by the additional money creation. The issue of poverty and unemployment has continued to be a core subject matter in nigeria and other african countries alike. Effect of unemployment and inflation on wages in nigeria. We will consider five causes of unemployment in nigeria. Inflation is said o occur when the genral level of prices rises rapidly and persistently over a givebn period of time. Purpose to investigate and determine the effects of unemployment and inflation on economic performance in nigeria within the specified period as in the title.

Both are responsible for a general rise in prices in an economy. Jan 16, 2020 there are two main causes of inflation. Over the years, economists have tried to investigate the effect of inflation and unemployment on poverty level plus identifying the role of government in controlling unemployment, inflation and poverty. The rate at which unemployed graduates roam the street after. Unemployment in nigeria is a major problem both economically and socially. The right set of antiinflation policies, those aimed at reducing inflation, depends on the causes of inflation. Causes and effects of graduate unemployment on the nigerian. The impact of unemployment and inflation on economic. Inflation and unemployment impact economic the economy through reduction in purchasing power, rising unemployment, rising poverty, lower aggregate demand, poor foreign and domestic investment, poor economic growth among others. These could either be an increase in the ability to buy goods or an increase in the willingness to do so. The study set three major objectives which include determine the relationship between economic growth, inflation and unemployment. Pdf causes, effects and solutions to youth unemployment. Demandpull conditions occur when demand from consumers pulls prices up. According to this theory, inflation depends on the level of actual output gdp and.

Macroeconomic determinants of unemployment wiley online library. This effect decisions on expenditure, savings, investment and misallocation of resources. These are the major external factor contributing to nigerias inflation. The relationship between inflation and unemployment in most years, inflation tends to rise when unemployment falls, and vice versa. Studies show that unemployment in nigeria was not a serious problem before and after the civil war 19671970, 10,11.

The result shows that a 1% increase in inflation rate will reduce unemployment rate by 0. This page provides nigeria inflation rate actual values, historical data, forecast. This is commonly described as too much money chasing too. Causes and effects of graduate unemployment on the. It is generally stated as a percentage and calculated by dividing the. Nigeria inflation rate 19962020 data 20212022 forecast. The impact of inflation on unemploym ent in nigeria 200120. As per the report of the world bank, 2005 the gdp at purchasing power. Therefore, the research work intends to make a critical assessment of the determinants of inflation in nigeria is the necessary condition upon which a lasting solution to inflation can be found in nigeria. When considering the causes of unemployment we look at the economic condition and demography of the country. Here, you can also find the inflation definition and the information about the current inflation rate in nigeria. Causes of inflation in ghana pdf explain that this negatively affects banks profits and can result in them closing some of their branches or going out of business completely.

Unemployment refers to the share of the labor force that is without work but available for and seeking employment. Low consumer confidence as a result of inflation, leads to less spending. Impact of inflation and unemployment on economic growth of. What is the guarantee that large army of unemployed. This huge figure implies that the rate of unemployment is really high. Impact of unemployment on economic growth in nigeria. Nov 20, 2019 nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. The study was conducted to evaluate the impact of inflation on economic growth in the context of an emerging market using empirical evidence from nigeria. Motivated by this controversial, this study examined the impact of inflation on economic growth and established the existence of inflation growth relationship. Before sap, inflation in nigeria was by primary rising the world export price and falling output. Ineffective leadership and corruption, over reliance on oil, inflation, unemployment, government policy, monetary policies, inadequate. Moreover, money exhausted on the products causes inflation. Accordingly, the broad objective of this paper is to examine the effect of unemployment and inflation on wages in nigeria.

Or inflation is attributed to budget deficit financing. The trend between inflation and economic growth in nigeria the facts and figures obtained from the imf world economic outlook report 2011 revealed that the nigerias gdp tends to be low when the inflation rates are high apart from a few years of the 80s. Inflation and unemployment tradeoff contemporary economics. Effect of inflation on the growth and development of the nigerian economy an empirical analysis aminu umaru lecturer department of economics school of management and information technology modibbo adama university of technology yola,adamawa state, nigeria. Causes of inflation demandpull inflation arises when aggregate demand in an economy outpaces aggregate supply it involves inflation rising as real gross domestic product rises and unemployment falls. Causes, effects and solutions to youth unemployment problems. Anono abdulrahman zubairu lecturer department of management technology. Determinants of the rate of unemployment in nigeria. This research will discuss in details the causes of poverty and unemployment in nigeria.