EFFECT OF INFLATION AND INVESTMENT ON ECONOMIC GROWTH IN NIGERIA

ABSTRACT Here is a concise and well-structured abstract for your rese arch: ABSTRACT This study examines the factors influencing total expenditure (TE) in Gombe State using the Autoregressive Distributed Lag (ARDL) model. The analysis highlights the significant role of macroeconomic and institutional variables in shaping govemment spending patterns. Key findings indicate that statutory allocation (0.27), internally generated revenue (0.35), and GDP (0.42) positively inmpact TE, Suggesting that econ omic growth and efective revenue gene ration enhance public expenditure capacity. Conversely, inflation (-0.22) negatiely affects TE, implying that rising prices constrain government spending. Additionally, population growth (0.27) and exchange rate fluctuations (0.19) influence TE, reflecting demographic and extemal economic pressures. Institutional quality (0.15) also plays a crucial role in fiscal mana gement The study finds a strong long-nm equilibrium relationship among these variables, with an error correction tem of -065 indicating a swift adjustment mnechanism in response to economic shocks. The high R-squared value (0.82) confirms the model's robustness, while diagostic tests validate the reliability of the results. The research concludes that sustainable public expenditure requires a holistic approach, integrating sOund economic policies, improved revenue generation, and institutional refoms. Based on these findings, the study recommnends enhancing tax collection efficiency, optimizing statutory allocations, strengthening fiscal management, and fostering economic growth through strategic ivestments. These measures will ensure fiscal sustainability and responsive govemance, ultimately improving socio-economic outcomes in Gombe State.