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A test for the contributions of urban and rural inflation to inflation persistence in Nigeria

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  • Godday Uwawunkonye Ebuh
  • Afees Salisu
  • Victor Oboh
  • Nuruddeen Usman

Abstract

This study tests the contributions of urban and rural inflation to inflation persistence in Nigeria using the fractional cointegration VAR model and the univariate fractional integration approaches. The results indicate a high contribution of urban and rural inflation to the overall inflation persistence in Nigeria albeit with contrasting evidence for the pre-and post-Global Financial Crisis (GFC) periods. While the urban inflation contributed more than the rural inflation to the persistence of the overall inflation during the pre-GFC, the converse holds during the post-GFC. Although, the empirical analysis of the factors underlying this outcome is reserved for future research, bridging the gap between the two inflation subsamples would be a plausible policy action.

Suggested Citation

  • Godday Uwawunkonye Ebuh & Afees Salisu & Victor Oboh & Nuruddeen Usman, 2023. "A test for the contributions of urban and rural inflation to inflation persistence in Nigeria," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 16(2), pages 222-246, May.
    • Handle: RePEc:taf:macfem:v:16:y:2023:i:2:p:222-246
    DOI: 10.1080/17520843.2021.1974507
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