ABSTRACT
The study examined the validity of Friedman’s hypothesis and subjected to test the
stability of money demand function in Nigeria over the period of 1970-2006 using
the Nigerian time series data. The study applied the Granger causality test and the
Distributed Lag Model (DLM) to estimate two distinct equations, while the
CUSUM and CUSUM Squares test procedure was used to examine the stability of
money demand function. As a matter of necessity, we subjected our variables to
time series econometric tests using the Augmented Dickey Fuller (ADF) unit root
test for stationary and Engle Granger co-integration procedure.
The empirical result showed that there is a unidirectional causality from money
supply to inflation and no feedback effect. This finding indicates that inflation truly
is a monetary phenomenon and validates the monetarist stance. Hence, there is an
existence of Friedman’s hypothesis in Nigeria.
However, the study also revealed that there is no long run relationship between
money demand and inflation in Nigeria, while the stability test provides evidence that money demand function in Nigeria was stable over the period of estimation.
K., C (2021). Money Supply And Inflation Dynamics: A Critical Appraisal Of Milton Friedman’s Hypothesis In Nigeria. Afribary. Retrieved from https://track.afribary.com/works/money-supply-and-inflation-dynamics-a-critical-appraisal-of-milton-friedman-s-hypothesis-in-nigeria
K., CHIME "Money Supply And Inflation Dynamics: A Critical Appraisal Of Milton Friedman’s Hypothesis In Nigeria" Afribary. Afribary, 20 May. 2021, https://track.afribary.com/works/money-supply-and-inflation-dynamics-a-critical-appraisal-of-milton-friedman-s-hypothesis-in-nigeria. Accessed 03 Oct. 2024.
K., CHIME . "Money Supply And Inflation Dynamics: A Critical Appraisal Of Milton Friedman’s Hypothesis In Nigeria". Afribary, Afribary, 20 May. 2021. Web. 03 Oct. 2024. < https://track.afribary.com/works/money-supply-and-inflation-dynamics-a-critical-appraisal-of-milton-friedman-s-hypothesis-in-nigeria >.
K., CHIME . "Money Supply And Inflation Dynamics: A Critical Appraisal Of Milton Friedman’s Hypothesis In Nigeria" Afribary (2021). Accessed October 03, 2024. https://track.afribary.com/works/money-supply-and-inflation-dynamics-a-critical-appraisal-of-milton-friedman-s-hypothesis-in-nigeria