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The Impact Of Inflation On The Manufacturing Sector Of The Nigerian Economy (1981- 2011)
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1.2 STATEMENT OF PROBLEM
Inflation worsens the balance of payment
positions. Inflation has helped forced up interest rates thus
determining investment and so by doing reduces the real values of
aggregate consumer wealth such as government debt and money. It has
inhibited and distorted consumer spending by rising domestic prices
relative to foreign prices, the currency inflation inhibits exports and
stimulates imports thus, depleting the nations scarce foreign resources.
Due
to the inflationary situation savers find out that the value of their
savings is eroded hence they are forced to add their current consumption
thus hindering capital formation and the nation’s economic growth.
Inflation militates against long term savings plan of the consumer and
hence becomes a function in improving a sub optimal lifetime consumption
pattern upon the consumer.
Current inflation rates in Nigeria have
tremendously complicated and continued to complicate the task for makers
of government fiscal and monetary policies. Even when they believe that
rate of inflation is really the public does not. This inflation not
only makes it harder for policy makers to diagnose the factors affecting
aggregate demand.
1.3 RESEARCH QUESTION
The questions we are investigating here are:
What
significance does inflation have on the manufacturing sector of the
Nigerian economy? What is the effect or impact of inflation on the money
sector of the Nigerian economy? Does government expenditure have
positive effect on the manufacturing sector of the Nigerian? Is there
any relationship between interest rate and the manufacturing sector of
the Nigerian economy? What is anti-inflationary policies pursued at
present and in the past by Nigerian government?
1.4 OBJECTIVES OF THE STUDY
The
major objective of this study is to determine empirically the impact of
inflation on the manufacturing sector of the Nigerian economy.
The specific objectives includes
1. To investigate empirically the relationship between inflation and the manufacturing sector.
2. To assess the impact of government expenditure on the manufacturing sector
3. To determine the nature of the relationship between interest rate and manufacturing sector of the Nigerian economy.
4. To review the past and present anti-inflationary policies of the Nigerian government
CHAPTER ONE -- [Total Page(s) 3]
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ABSRACT - [ Total Page(s): 1 ]This study analyses the linkage between inflation rate and manufacturing sector of the Nigerian economy over the period of (1981-2011). The study used data sourced from the Central Bank of Nigeria (CBN). The ordinary least square technique (OLS) was used to specify and examine the relationship between the variables Government expenditure, inflation rate and money supply which are the independent variables and the manufacturing index which is the dependent variable for the first model. The indepe ... Continue reading---
