Acta Universitatis Danubius. Œconomica, Vol 13, No 2 (2017)

An Estimated New Keynesian Phillips Curve for Nigeria

Mutiu Gbade Rasaki


The paper estimates a New Keynesian Phillips curve (NKPC) model for the Nigerian economy. This is to identifying the structural parameters determining inflation dynamics in Nigeria. Previous studies that examine the dynamics of inflation in Nigeria have largely estimated the traditional Phillips curve.This study employs quaerterly time series data on six macroeconomic variables from 1990:1 to 2012:4. The study adopts the General Methods of Moment (GMM) technique to analyse the data. The findings indicate that both backward-looking and forward-looking behaviour are significant determinants of inflation dynamics in Nigeria. The results, however, suggest that backward-looking behaviour seems to be more quantitatively important in inflation dynamics. Moreover, the fndings indicate that foreign input price, money supply and the lending rtae are the drivers of inflation in Nigeria.  


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