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Effect Of Unemployment And Inflation On Economic Growth In Nigeria, 1986-2012.

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This thesis investigates the effects of unemployment and inflation on economic growth in 
Nigeria between 1986-2012 through the application of Ordinary Least Square (OLS) 
technique in estimating the effects of unemployment and inflation on growth, Augmented 
Dickey-Fuller test and Phillip‟s-Perron test statistics were employed to test the presence of 
unit root in the series, after which Johansen cointegration test was employed to test the 
existence of long-run relationship between economic growth and the independent variables. 
The results of unit root suggest that all the variables in the model were stationary. The 
Johansen cointegration result shows that there exist 2 cointegrating equations, implying the 
existence of long run relationship between economic growth, unemployment and inflation. 
The results also reveal that unemployment impacts negatively on economic growth while 
inflation rate impacts positively on economic growth. However,, only the coefficient of 
unemployment was found to be significant. The hypothesis test result using f-statistics 
reveals that unemployment and inflation jointly affect economic growth at 1 percent and 5 
percent respectively, with values of 5.8900 in model II and 4.0637 in model III. This 
therefore, implies that a good performance of the Nigerian economy in terms of growth may 
be achieved with lows rate of unemployment and inflation in the country. Based on the 
coefficients of unemployment -4.6727 and inflation 0.0246 in model III, it follows that 1 
percent reduction in unemployment would increase economic growth by 4.6727 percent, 
while 1 percent increase in inflation would increase economic growth by 0.0246 percent; 
hence a major policy implication is that concerted effort should be made to reduce 
unemployment and stabilize the prices of goods and services (inflation) so as to achieve high, 
rapid and sustained economic growth rate in Nigeria.     
 
TABLE OF CONTENT
 
Title Page 
Declaration  
Certification page
Acknowledgement
Abstract
Table of contents 
List of Tables
List of Figures  
References 
Appendix 

CHAPTER ONE  INTRODUCTION
  
Background of the study  
Statement of the problems 
Research questions
Objectives of the study 
Hypothesis  
Significance of the study 
Scope and limitations of the study 
Organization of the study
 
CHAPTER TWO  LITERATURE REVIEW
 
Introduction 
Conceptual Literature 
Overview of unemployment, inflation and economic growth in Nigeria 
Causes of unemployment and inflation in Nigeria  
Strategies and policy frameworks for unemployment and inflation reduction in Nigeria         Theoretical literature  
Theories of unemployment  
Theories of inflation
Theories of growth  
Empirical literature 

 CHAPTER THREE   RESEARCH METHODOLOGY 

Framework for methodology
Empirical Framework 
Expected result of the study
Models Specification 
Diagnostic Test  
Sources of data 

CHAPTER FOUR  DATA PRESENTATION AND ANALYSIS
 
Data presentation
Empirical Results and Discussion 
Hypothesis Testing/correlation coefficients Results
Discussion of Unit root Test Results  
Discussion of Cointegration Results 
Findings of the Study 

CHAPTER FIVE  SUMMARY, CONCLUSION AND RECOMMENDATIONS 

Summary of Findings
Conclusion
Recommendations
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