EkBis: Jurnal Ekonomi dan Bisnis
Vol. 7 No. 1 (2023): EkBis: Jurnal Ekonomi dan Bisnis

Domestic Credit and Inflation Rate Shock: A New Empiric Evidence from Nigeria

Adegboyega, Soliu Bidemi (Unknown)
Odusanya, Ibrahim Abidemi (Unknown)
Ogede, Jimoh Sina (Unknown)
Atoyebi, Olayinka Esther (Unknown)



Article Info

Publish Date
30 Jun 2023

Abstract

The study evaluates the relationship between domestic credit and Nigeria's inflation rate analysing data spanning from 1986 through 2020. The research is ex-post in nature, hence the study employed statistical analysis models to build a predictive assessment for inflation, leveraging on the Autoregressive distributed lag model (ARDL) and the Granger Causality test to ascertain the magnitude of the association and the direction of causation, separately. The study confirms the complexities of Nigeria's relationship between domestic credit and inflation, with economic growth maintaining a positive and insignificant relationship with inflation (INF), while credit to the private sector (CPS) and interest rates have a negative and insignificant relationship with inflation in the long run. Furthermore, in the short run the coefficient of error correction model showed a negative sign, suggesting a short run effect between inflation rate and domestic credit.  The findings reaffirm the one-way relationship between inflation and private sector domestic credit. It is advised that funding tools be used efficiently and effectively to fulfil desired investment, competitiveness, and economic growth drives.

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Journal Info

Abbrev

ekbis

Publisher

Subject

Economics, Econometrics & Finance

Description

EkBis: Jurnal Ekonomi dan Bisnis is an open access, peer reviewed journal, published by Fakultas Ekonomi dan Bisnis Islam, UIN Sunan Kalijaga Yogyakarta. EkBis invites researchers, academics, and practitioners to publish their original, conceptual, theoritical, and empirical research regarding the ...