Effect Of Inflation On Aggregate Consumption Expenditure In Nigeria:- Ifejiofor Oluebube C

Abstract

The study is an attempt to determine the effect ofinflation on private consumption expenditure in Nigeria Following an extensive review oftheoretical and empirical literature, the study estimated a multiple regression model with total private consumption expenditure as the dependent variable, while GDP per capita , interest rate, inflation rate and total national savings as independent variable. Annual time series data rangingfrom 1981- 2017 ofthe selected variables were employed in the analysis. The study established that Inflation is has a lagged negative short run and long run effect on household consumption in Nigeria in the period under review . An Increase in the general price level reduces the purchasing power of money thereby reducing consumption expenditure. Finally, the studyfound a long run relationship between inflation and consumption expenditure in Nigeria.