NEXUS BETWEEN INFLATION AND UNEMPLOYMENT IN NIGERIA AN EMPIRICAL ANALYSIS OF THE PHILLIP’S CURVE

ABSTRACT This study examines the nexus between inflation and unemployment rates in Nigeria from 1999 to 2024. Specifically the objectives of the study were to examine the effect of unemployment on inflation in Nigeria, to examine the effect of inflation on unemployment in Nigeria, to assess the significance of Phillip’s curve in Nigeria and to examine the effect of GDPG on unemployment in Nigeria. The study employs various techniques of econometric analysis, using macro-economic variables such as unemployment, inflation and GDPG. Time series data was sourced from central bank statistical bulletin and world development index. The study employed Johansen co-integration test. The results revealed that among the independent variables which includes, inflation, GDPG were found to have significant impact on unemployment rate, while inflation is expected to have a positive and substantial effect on unemployment rate. The gross domestic product (GDP) which is a proxy of economic growth was also revealed by the estimation to have a negative and significant impact on unemployment rate, investment in Nigeria. Lastly, the study recommends that the diversification of the economy will enable the country to cushion the effect of risk which will increase the attractiveness of the economy to investors in the secondary and tertiary institution and openness to trade.