Energy Price Fluctuation and Inflation in Nigeria: A Granger Causality Analysis
1Leera Lenu Kpagih1, 2Chidum Chibueze Chinda, 3Dr Victor Akidi
1,2,3Rivers State University
https://doi.org/10.47191/jefms/v5-i3-02ABSTRACT:
The Nigerian economy depends to a reasonable extent on the sale of crude oil for its expenditure. The country also depends on importation for a high level of its consumption. Given these events, this paper set out to investigate the causality effect of energy price fluctuations on inflation in Nigeria. This was done using time series data from 1985 to 2018. Oil price, gas price and exchange rate were the independent variables and inflation was the dependent variable. The result of the pairwise granger causality test shows that inflation is not caused by oil price or gas price fluctuations. The paper proposes that fiscal and monetary policy should be engaged to understand the causes of inflation in Nigeria.
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