Economic and Financial Review


Dipo T. Busari


Central Bank of Nigeria, Research Department


Inflation decomposition, Determinants, Inflation, Nigeria


This paper sets out to examine the main economic determinants of inflation in Nigeria over the period 1980-2003 using quarterly data. Using, among other measures, the Hodrick and Prescott filter, inflation is decomposed into its trend, cyclical, seasonal, and, random components. Based on the time series characteristics of the variables used in the analysis, the paper adopted the general-to- specific modelling approach to investigate the main determinants of each component. The results confirm that, in the long run, inflation is largely and positively related to the level of (narrow) money supply and, marginally, to fiscal deficit.





Recommended Citation

Busari, Dipo T. (2007). On the determinant of inflation in Nigeria: 1980-2003. CBN Economic and Financial Review, 45(4), 35-55.



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