Causality Dynamics between Money Supply and Inflation in Nigeria: A Toda-Yamamoto Test and Error Correction Analysis

Umoru David and Tizhe N. Ann

Journal of Empirical Economics, 2014, vol. 3, issue 2, 63-75

Abstract: This paper examines the dynamics between money supply and inflation in Nigeria using the Toda-Yamamoto causality test and the error correction methodology from the period of 1980-2012. Causality is found to run from money stock to output and inflation within the confines of the Nigerian economy. The estimated inflation elasticity of money stock is 1.002. Accordingly, increase in money supply is proportionately matched by the increase in inflation rate in Nigeria. Therefore, the study concludes that inflation is a purely monetary phenomenon in Nigeria as the coefficient of broad money supply is equals unity.

Keywords: Inflation; output; money supply; error correction model; Toda-Yamamoto causality test; Nigeria (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://rassweb.org/admin/pages/ResearchPapers/Paper%202_1497024749.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rss:jnljee:v3i2p2

Access Statistics for this article

More articles in Journal of Empirical Economics from Research Academy of Social Sciences
Bibliographic data for series maintained by Danish Khalil ().