MANAGING AN ECONOMY IN THE PERIOD OF STAGFLATION: THE NIGERIAN EXPERIENCE

This study is on Managing an Economy in the Period of Stagflation: The Nigerian Experience focuses on what has been the impact of both inflation and unemployment rates on the Nigerian economy. During stagflation, an economy is faced with the twin problem of inflation and unemployment rates. The concern associated with the coexistence of inflation and unemployment rates in an economy has been age long and contentious. With data sourced from the World Data bank covering the period between 1999 and 2021; and using such research technique as Ordinary Least Square (OLS) regression alongside its accompanying test like the descriptive statistics and the unit root test for stationary. The estimated results showed that inflation rate had a positive (B=0.222542) but none statistically significant (pvalue 0.2215> 0.05) impact on GDP growth rate in Nigeria, while unemployment rate on the other hand, in line with apriori expectation was negative (B = -1.235799) and statistically significant (p-value 0.0006< 0.05). This implies that there have been significant rise in the number of the unemployed and an indication that the economy do not have absorptive capacity. The study therefore recommended that the managers and the planners of the economy should ensure that the inflation rate is kept within the threshold permitted by economic realities. And that output should be boosted to keep prices of goods and services stable in the economy and that they should intentionally grow the economy in the sector that would create jobs space for the army of the unemployed in Nigeria. That is, the growth in the economy should be accompanied with absorptive capacity for the unemployed and the underemployed in Nigeria.

1 22 Mar, 2024

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