EffectofInflationontheGrowthandDevelopmentofthe.pdfVIP

International Journal of Business and Social Science Vol. 3 No. 10 [Special Issue – May 2012] 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. Anono Abdulrahman Zubairu Lecturer Department of Management Technology School Of Management and Information Technology Modibbo Adama University of Technology,Yola,Adamawa State,Nigeria. Abstract This paper investigates the impact of inflation on economic growth and development in Nigeria between 1970- 2010 through the application of Augmented Dickey-Fuller technique in testing the unit root property of the series and Granger causality test of causation between GDP and inflation. The results of unit root suggest that all the variables in the model are stationary and the results of Causality suggest that GDP causes inflation and not inflation causing GDP. The results also revealed that inflation possessed a positive impact on economic growth through encouraging productivity and output level and on evolution of total factor productivity. A good performance of an economy in terms of per capita growth may therefore be attributed to the rate of inflation in the country. A major policy implication of this res