Abstract
This study investigates the relationship between inflation rate and economic growth in Nigeria taking into consideration the effect of population growth in the country. The study uses annual time-series data from 1981 to 2023. The study controls for foreign sector influence, measured in exchange rates and FDI inflows, as well as cost of capital, measured in interest rates; while Gross Domestic Product (GDP) was used as proxy for Economic Growth. Data used were sourced from the CBN Statistical Bulletin, National Bureau of Statistics and World Development Indictors (WDI) database. The variables were subjected to unit root tests using Augmented Dickey-Fuller method. The variables are integrated at level, while others at first difference; a mixture of I(0) and I(1). Consequently, autoregressive distributed-lag (ARDL) model is employed to capture both the short-run and the long-run influences of the explanatory variables. The results reveal that inflation rate has no any influence on economic growth both in the short-run and long-run. Meanwhile, population growth exerts a positive impact on GDP but only in the short-run. Specifically, a unit increase in the population growth will increase GDP by 1.77 units in the short-run but not in the long-run. Other control variables, interest rate and exchange rate depreciation, are found to have more profound effects on economic growth. The error correction term (ECM) is found to be 0.219 implying about 22% convergence per each period. Thus, the study recommends measures to control inflation and slow the growth of population, while optimizing interest and exchange rates, to achieve sustainable economic growth in the country.