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EFFECT OF CONSUMER PRICE INDEX ON NIGERIA'S ECONOMIC GROWTH USING AUTOREGRESSIVE DISTRIBUTED LAG MODEL APPROACH
Kolade Anna¹, Bilkisu Maijama’a ² and Shammah Emmanuel Chaku ³

ABSTRACT
This study examined the effect of the consumer price index on Nigeria's economic growth. All variables in the model were allowed to be endogenous using the Autoregressive distributed lag Model (ARDL). The study used Secondary data from 1983 to 2023. The study uses the autoregressive distributed lag Model and an Error correction mechanism on some selected relevant variables, which include Gross domestic product (GDP), Inflation rate, Interest rate, Exchange rate, degree of economic openness, money supply, and government consumption expenditures for the years 1983–2023 to investigate the effect of CPI on the growth prospects of the Nigerian economy. According to the results of other researchers who conducted comparable studies, the money supply and interest rate significantly influence economic growth. In contrast, the real exchange rate and inflation have a significant negative impact. The model's other variables show little impact on Nigeria's economic growth. The causation result demonstrates the one-way links between the gross domestic product, government consumption expenditures, interest rates, and exchange rates. However, there is no correlation between the degree of openness and Inflation and the GDP. As a result, the study concludes that to prevent inflation's adverse effects and ensure a practicable rate that would support Nigeria's economic growth, the monetary authorities should make a more concerted effort to tackle high inflation in the economy. Keywords: Consumer Price Index, Gross Domestic Product, Economic growth, Autoregressive distributed lag (ARDL), and Error correction Mechanism


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The Beam journal of arts and science
ISSN: 1118-5953 www.uaspolysok.edu.ng/jounal