Title: Validity Of The Relationship Between Inflation And Unemployment In Nigeria During Economic Shocks (1991 - 2020)
Authors: Gideon Marvelous Aremu, Quwiyu Akanni Salaam & Benjamin Taylor
Volume: 9
Issue: 12
Pages: 97-109
Publication Date: 2025/12/28
Abstract:
The study examined the existence of trade-off relationship between inflation and unemployment in Nigeria. It also assessed the applicability of the Phillips Curve during economic shock like Covid-19 pandemic in Nigeria. Macroeconomic indicators such as unemployment rate, inflation rate, money supply rate and total government expenditure rate were obtained from 1991 to 2020. Econometric models such as Augmented Dickey-Fuller (ADF), Ordinary Least Square Estimation (OLS), Engle-Granger Cointegration, First Difference Autoregressive Distributive Lag (ARDL), Normality test, Variance ipnflation factor and Breusch-pagan were used to analyse obtained data. The results showed that there was no trade-off relationship between inflation and unemployment in Nigeria. The results also revealed that the principles of Phillips Curve did not hold during economic shock like Covid-19 pandemic in Nigeria. The study concluded that that inflation and unemployment were both high during economic shocks like Covid-19 in Nigeria. The recommendation of the study was that government should formulate fiscal and monetary policies that will achieve increase in employment as well as reduction in inflation in Nigeria.