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Public debt and inflation nexus in Nigeria: An ARDL bounds test approach

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  • Akingbade U. Aimola
  • Nicholas M. Odhiambo
  • Christian Nsiah

Abstract

Inflationary tendencies of public debt have been the cause of an unsettling debate among policymakers in Nigeria. Using the autoregressive distributed lag (ARDL) framework, this study attempts to investigate the impact of total public debt on inflation in Nigeria for the period 1983–2018. The cointegrating regression results reveal evidence of a stable long-run relationship among inflation, total public debt, money supply, interest rate, economic growth, trade openness, and private investment in the presence of structural breaks. Empirical results show that the impact of public debt on inflation is statistically insignificant, irrespective of whether the regression was in the short or the long run. Hence, the study concludes that inflation in Nigeria could be driven by other factors other than public debt.

Suggested Citation

  • Akingbade U. Aimola & Nicholas M. Odhiambo & Christian Nsiah, 2021. "Public debt and inflation nexus in Nigeria: An ARDL bounds test approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1921905-192, January.
    • Handle: RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1921905
    DOI: 10.1080/23322039.2021.1921905
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    Cited by:

    1. Mesbah Fathy Sharaf & Abdelhalem Mahmoud Shahen, 2023. "Does external debt drive inflation in Sudan: evidence from symmetric and asymmetric ARDL approaches," Journal of Business and Socio-economic Development, Emerald Group Publishing Limited, vol. 3(4), pages 293-307, August.
    2. Aimola Akingbade U. & Odhiambo Nicholas M., 2022. "Is the effect of public debt on inflation symmetric or asymmetric? Evidence from the Gambia," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(1), pages 41-57, June.
    3. Samuel Osei-Gyebi & Patricia Ajayi, 2025. "Effect of renewable energy consumption and public debt on human capital in Nigeria," SN Business & Economics, Springer, vol. 5(3), pages 1-27, March.

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