Exploring the Relationship between Consumer Price Index (CPI) and Producer Price Index (PPI) in Nigeria

Authors

  • Olusola Joel Oyeleke
  • Oladele Adeyi Ojediran

DOI:

https://doi.org/10.14738/assrj.511.5450

Abstract

The study investigated the relationship between consumer price index (CPI) and producer price index (PPI) in Nigerian economy, using monthly data from 2013: 01 to 2018: 05. The study employed DF-GLS unit root test to verify the stationarity of the series. Cointegration tests involving Johansen and Engle-Granger approaches could not detect long run relationship between CPI and PPI, implying that the variables could not be substituted for each other in measuring inflation rate in Nigeria. Vector Autoregressive (VAR) technique was used to analyse the variables and the results revealed that there was no causality between CPI and PPI in Nigeria. However, the OLS result in Engle-Granger 2-step approach to cointegration provided a useful insight into the relationship between the variables. An increase in either CPI or PPI exerted a statistically significant reduction effect on the rate of other in the long run.

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Published

2018-11-13

How to Cite

Oyeleke, O. J., & Ojediran, O. A. (2018). Exploring the Relationship between Consumer Price Index (CPI) and Producer Price Index (PPI) in Nigeria. Advances in Social Sciences Research Journal, 5(11). https://doi.org/10.14738/assrj.511.5450

Issue

Vol. 5 No. 11 (2018): Advances in Social Sciences Research Journal

Section

Articles

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