The study aims at evaluating the link between inflationary rate and economic growth in Nigeria. It also examines the nature and form of association between inflationary rate and exchange rate as well as interest rates from 1979 t0 2010.Ordinary least squares approach in the form of multiple regression was adopted in examining the relationship among the variables while the causalities were evaluated using Granger Causality model. It is pertinent to check whether the short run relationships would be sustained in the long run. To achieve this, Johansen and Juselius cointegration technique was adopted while the variables were adjusted for stationarity using the Augmented Dickey- Fuller (ADF) tests for unit root. It was found that inflationary rate is negatively related with real gross domestic product while exchange rates and interest rates are positively related with inflationary rate though not to a very significant extent. This is sustainable even in the long run and the implication is that when inflationary rate is rising, it affects the economy negatively as growth is dampened. On causality, at both lag 2 and lag 4, the study reveals that there is no causality between inflationary rate and real gross domestic product. However, at lag 2, there is a unidirectional causality running from inflationary rate to interest rate and also a unidirectional causality running from interest rate to real gross domestic product. At lag 4, there is a unidirectional causality running from interest rate to inflationary rate and from interest rate to exchange rate and also a unidirectional causality running from exchange rate to real gross domestic product. Consequently, efforts should be geared towards keeping inflationary rate at a single digit level to enhance the growth and development of Nigeria economy and to ensure that macroeconomic activities are kept alive
Most time series analysts have used different technical and fundamental approach in modeling and to forecast exchange rate in both develop and developing countries, whereas the forecast result varies base on the approach used or applied. In these view, a time domain model (fundamental approach) makes the use of Box Jenkins approach was applied to a developing country like Nigeria to forecast the naira/dollar exchange rate for the period January 1994 to December 2011 using ARIMA model. The result reveals that there is an upward trend and the 2nd difference of the series was stationary, meaning that the series was I (2). Base on the selection criteria AIC and BIC, the best model that explains the series was found to be ARIMA (1, 2, 1). The diagnosis on such model was confirmed, the error was white noise, presence of no serial correlation and a forecast for period of 12 months terms was made which indicates that the naira will continue to depreciate with these forecasted time period.
This paper examines and ascertains how the contributions of Richard Cantillon have been relevant to the development of the Nigerian economy. In doing this, the economic thoughts of Richard Cantillon were critically examined in order to see how these issues raised have been affecting the Nigerian economy. Political economy and descriptive approaches were used to x-ray the relevance of Richard CantillonвЂ™s contributions to NigeriaвЂ™s development. His contributions among others include: the nature of wealth, social and economic organization of people, wages of labour, theory of values, population problems and the use of gold and silver, barter, prices, circulation of money, interest, foreign trade, foreign exchange and banking and credit. The findings of the study revealed that these contributions are of great relevance to economic development in generally, but have not specifically contributed to the development of Nigerian economy. This is seen in the areas of low per capita income, negative attitude to work, inevitable population problems, persistent increase in prices, high lending interest rate, unfavourable terms of trade, incessant and diversion of public funds into private business rather than the real economy, and without doubt Nigeria has no place in foreign trade. Based on the foregoing, it was concluded that all these ugly trends accounted for the reason why economic development is not at sight in Nigeria. Thus, it was recommended that the monetary authorities should initiate sound monetary policies. Also, these monetary policies should be complemented with effective fiscal policies in order to put the Nigerian economy back to path of economic growth and development.