An Empirical Analyses of the Effect of National Debt on Inflation Rate in Nigeria
- Post by: airjournals
- March 31, 2021
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This study reviewed the relationship between national debt and inflation rate in Nigeria using multiple linear regression and simple linear regression. Augmented-Dickey fuller test and Breusch-Pagan test were conducted to ascertain if my model follows the assumptions of ordinal linear regression (OLS). It was found that external debt and domestic debt in a multilinear model does not have any significant effect and/or relationship with inflation rate, while in a simple regression model (using national debt as predictor) does have a negative correlation with inflation rate. This supports the primary purpose for government borrowing, financing deficit budget for the prolonged growth and sustainability of the economy.
Keywords: Inflation Rate in Nigeria; External Debt; Domestic Debt; OLS
1Okafor, Victor Ikechukwu (PhD); 2Godspower, Jennifer Odinakachi; 3Obizuo, Chinwendu Judith