Beatrice Chinyere Williams, Sunday Idowu Oladeji, Rebecca Folake Bank-Ola


This study investigates the effect of money supply on inflation in Nigeria from 1981 to 2020. Money supply, Interest rate and Domestic credit were the independent variables while inflation was the dependent variable. Secondary time series data was employed for this study which was obtained from World Development Indicators (WDI), Error Correction Model (ECM) was adopted and the Auto-Regressive Distributed Lag (ARDL) model was employed after conducting a diagnosis test and ensuring that the data were stable. The results of the analysis showed that money supply had a negative and significant effect on the country’s inflation. Interest rate had a positive and significant effect on inflation; while domestic credit has a positive but insignificant effect on inflation consumer price. Based on the results of the variables, it is therefore recommended that the policies put in place by the monetary and fiscal authorities in Nigeria should be such that will encourage the supply of money to a certain level in order to curb inflation in Nigeria in the short medium and long term.


Inflation, money supply, Interest rate, domestic credit, private sector, Auto-Regressive Distributed Lag.

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