Relationship Between Inflation and Unemployment: Testing Philips Curve Hypotheses and Investigating the Causes of Inflation and Unemployment in Nigeria

The attainment of full employment and price stability are one the most widely used measures economic health. Inflation unemployment an integral part economy; however, there is a need to balance both such that neither inflation nor too high. persistent rise in rates has called for investigate relevance Philip’s postulation trade-off between Nigeria. In addition interdependency or independence these variables, also access factors may contribute increasing These will enable policymakers formulate policies affect pay attention other variables directly indirectly unemployment. Therefore, study aims test validity curve hypotheses examine possible causes secondary data sourced from Central Bank Nigeria World Bank. Vector Autoregressive Error Correction methods were adopted analysis. revealed no significant relationship Inefficiencies government’s side insufficient domestic investment observed be unemployment, whereas; exchange rate depreciation money supply blamed rising levels concludes problems arise inefficiencies monetary fiscal policies. Efficient use was recommended raise output all sectors meet steaming local demand export. Also, implementation diversification recommended. Furthermore, recommends government spending on social infrastructure incentives firms promote have overall effect output, reducing achieving non-inflationary growth