Budget Deficits, Money Growth and Price Level in Nigeria.

The study investigates the long-run causal relationship amongst budget deficits, money growth and price level for Nigeria between 1971 and 2008 inclusive. The empirical findings predict a long-term cointegrating relationship with unidirectional causality running from budget deficit to money supply growth and then from money supply growth to price level in the Toda and Yamamoto () sense. Thus, the Sargent and Wallace () 'Unpleasant Monetarist Arithmetic' hypothesis holds for Nigeria. [ABSTRACT FROM AUTHOR]