Application of ARIMA Methods on Unemployment and Inflation Rates in Nigeria
Article Sidebar
Page Numbers:
843-869
Digital Object Identifier:
10.58578/ajstea.v2i6.4087
Viewed: 318 times
Downloaded: 240 times
LYAS Publisher cordially invites qualified professionals to serve as Editors or Reviewers. Your expertise will make an important contribution to maintaining and strengthening the academic quality of our publications. Interested applicants are kindly requested to complete the application form at the following link: Editors & Reviewers
Please feel free to contact us if you need any further information about the submission process or if you have any additional questions.
Authors:
Clement Akobi1*, Adeniyi Ogunmola2 
Copyright :
Authors retain copyright and grant the journal right of first publication.
Main Article Content
Abstract
In Nigeria, Unemployment and inflation rate are some of the problems bedeviling the economy. The inability of Job seekers to secure gainful employment tends to create disaffection among these people and cause some of them especially the youth, to resort to social vices. In the motivation to experience low unemployment rate and inflation rate which are economic indicators in Nigeria, deriving appropriate ARIMA model to give insight into future occurrence of these indicators for intervention calls for the application of ARIMA model. This study seek to fit ARIMA model to unemployment rate and inflation rate and forecast future values for both unemployment rate and inflation rate. Utilizing secondary data sourced from the National Bureau of Statistics (NBS) from 1991 to 2020. The findings reveal that, for each of the two series, to obtain the appropriate ARIMA model that fits the data, ten closely suitable ARIMA models were identified. Using the least values of AIC, AICc and BIC as selection criteria, ARIMA (0, 1, 1) was found to be the best fitted model for each of the two series. Subsequent diagnostic checks confirm the adequacy of the fitted models, with residual analyses indicating no significant autocorrelation or heteroscedasticity. The forecasted values for the unemployment rate series and inflation rate series maintain a constant point forecast. This implies that unemployment rate and inflation rate in Nigeria does not reveal a noticeable increase nor decrease but will be constant in Nigeria. Due to the unchanging forecasted value which appears not to be decreasing, there is need for interventions that will lead to the visible reduction of present unemployment rate and inflation rate in Nigeria.
Downloads
Article Details
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
References
Adams, Patrick A., Tobias Adrian, Nina Boyarchenko, and Domenico Giannone. (2015). Forecasting Macroeconomic Risks. International Journal of Forecasting 37: 1173–91.
Ademola, A and Badiru, A (2015). The Impact of Unemployment and inflation on Economic Growth in Nigeria (1981 – 2014), International Journal of Business and Economic Sciences Applied Research, 9(1), 47-55. American Journal of Economics and Sociology, 53(1): 99-109.
Alanana, O. O. (2015). Unemployment and poverty situations in Nigeria: A review of the poverty-alleviation strategies. African Economic Research Consortium.
Aminu, U. & A.Z. Anono, (2012), 'an empirical Analysis of The Relationship between Unemployment and Inflation in Nigeria from 1977-2009', Business Journal, Economics and Review, 1(12), 42-61.
Aminu, U. and Manu, D. and Salihu, M. (2020). An Empirical Investigation into the Effect of Unemployment and Inflation on the Growth in Nigerian.Interdisplinary Journal of Research in Business. Vol.2 Issue.12
Asoluka N and Okezie A... (2019). Unemplo-yment and Nigerian economic growth for the period 1985-2009.
Ayesha, W. and K. Rukhsana (2013) „„The Impact of Inflation and Economic Growth on Unemployment‟‟: Time series Evidence from Pakistan.Proceedings of 3rd international Conference on Business Management (ISBN: 978-969-9368-07-3).
Azizan, Milojko, Zorica Mladenovi´c, and Aleksandra Nojkovi´c. (2018). Macroeconomic performance of inflation targeting in European and Asian emerging economies. Journal of Policy Modeling 44: 675–700.
Begg 2015; Kłos, 2014; Kwiatkowski, (2017). Labour Market Policy in Poland and in the United Kingdom. Studia Prawno-Ekonomiczne, XCIV.
Bello M & Auwal, A. (2015). Do Unemployment and Inflation Substantially Affect Economic Growth? Journal of Economics and Development Studies, 3(2), 132-139.
Borkowski, B., Krawiec, M. (2009). Ryzyko cenowe na rynku surowców rolnych. In: M. Hamulczuk, S. Stańko (red.), Zarządzanie ryzykiem cenowym a możliwości stabilizowania dochodów producentów rolnych – aspekty poznawcze i aplikacyjne.
Briggs CL (2017). Crime and Unemployment among Youth in the United States, 1958-1990.
Coghlan A. A Little Book of R for Time Series. United States: Calvin University; 2015.
Cruz, Drew, Siem Jan Koopman, and André Lucas. 2018. Generalized autoregressive score models with applications. Journal of Applied Economics 28: 777–95.
Cutler, D.M and L.F. Katz.(1990). Macroeconomic Performance and the Disadvantaged. Brookings Papers on Economic Activity, vol.2, pp.1-61. International Monetary Fund (IMF, 2016). (Washinghton DC; IMF).
Essien, E.A. (2015). Exchange Rate Pass-Through to Inflation in Nigeria. West African Journal of Monetary and Economic Integration (First Half), Vol. 5, Number 1, Accra: West African Monetary Institute.
Fatukasi D.N (2012). Observed Disparity in Nigeria Rural Poverty. University of Ibadan.
Gbosi S.C (2015). Economic Development.11th.Ed.Pearson Education Limited, England.
Hamilton, J.D. (2015): Time Series Analysis. Princeton University Press, Princeton.
http://www.academia.edu/1607476/Unemployment_and_Nigerian_Economic_Growth_1985-2009_
http://www.indexmundi.com/jordan/economy_profile.html Issue 7, Version 1. Journal of Management and Social Sciences, 2 (4), 55-63.
Mahmoud Ali J. (2018). Impact of inflation and unemployment on Jordanian GDP. Retrieved from http://journalarchieves28. webs.com/317-334.pdf
Mankiw, N. G. (2016). Principles of Economics. Cengage Learning.
Mehrnoosh M and Feizolah J(2017) Examining the Effects of Inflation and Unemployment on Economic Growth in Iran (1996-2012). Procedia Economics and Finance 36 (2016) 381 – 389
Mohsenia, M. and Jouzaryan, F., 2018 Examining the Effects of Inflation and Unemployment on Economic Growth in Iran. Procedia Economics and Finance, 36, pp.381-389
Muhammad Umair and Raza U. (2018). Impact of GDP and inflation on unemployment rate of Pakistan Economy in (2000-2010), Retrieved from http://irm brjournal.com/papers/1371452025.pdf
Ojo, M.O. (2012). The role of the Autonomy of the Central Bank of Nigeria (CBN) In Promoting Macroeconomic Stability. Central Bank of Nigeria Economic and Financial Review, Vol.38, Number 1, March.
Orji, A., Orji-Anthony, I., & Okafor, J. (2015). Inflation and Unemployment Nexus in Nigeria: Another test of the Phillip's Curve. Asian Economic and Financial Review, 1(4), 2-23.
Osinubi, T. S. (2016). The Nigerian labour market: Some relevant issues in a globalizing world. African Economic Research Consortium.
Oyelaran-Oyeyinka, B., & Lépissier, A. (2018). Industrial development and innovation in Nigeria: Changing the invisible. Routledge.
Phillips, A.W. (2016). The Relationship between Unemployment and Rate of Change in Money Wage Rates in the United Kingdom. Economica 25, November. Okun (2018)
Piana. A.S (2014) Inflation and Unemployment in the EU: Comparative Analysis of Phillips Regularity.UDK 336.748.12, 331.56 Proceedings of the 2011 International Conference on Teaching, Learning and Change (c) International Association for Teaching and Learning (IATEL). Retrieved from Salami C.G.E (2011) Entrepreneurial Interventionism and challenges of Youth.
Shahid, M. (2020) study on the impact of inflation and unemployment on the economic growth of Pakistan via the ARDL model approach. International Journal of Developing and Emerging Economies Vol.5, No.1, pp.26-39, April 2017 Published by European Centre for Research Training and Development UK (www.eajournals.org) 28 ISSN 2055-608X(Print), ISSN 2055-6098(Online) In line with the above
Shiferaw, Admasu. (2017). Productive Capacity and Economic Growth in Ethiopia. Available online: http://www.un.org/en/ development/desa/papers/ (accessed on 25 July 2019).
Silvapulle, P., Moosa, I.A. and Silvapulle, M. (2020) Asymmetry in Okun’s Law, Canadian Journal of Economics, 37:353-374. Index Mundi web (2013), Jordan Economy Profile 2013, Source: CIA World Fact book.
Soytas M.W, 2011. Forecasting Inflation‟ ‟National Bureau of Economic Research NBER Working Paper 7023, March
Stephen, B. A. (2019). Stabilization policy, Unemployment Crises and Economic Growth in Nigeria. Universal
Taylan, T.D. (2012). Macroeconomic variables and unemployment: the case of Turkey. International Journal of Economics and Financial Issues, 2(1), pp. 71-78.
Thayaparan, A (2014). Impact of Inflation and Economic Growth on Unemployment in Sri Lanka: A Study of Time Series Analysis. Global Journal of Management and Business Research: Economics and Commerce, 13(5), 1-11.
Udabah, S. (2019). Unemployment and underemployment in Nigeria: The case of Yala Local Government Area, Cross River State, Nigeria. Global Journal of Social Sciences, 3(1), 21-25.
Umaru, A. & Zubairu, A. A. (2013). An Empirical Analysis of the Relationship between Unemployment and Inflation in Nigeria. Economic and Finance Review, 1(12): 42-61.