Investigating If Inflation is always and Everywhere a Monetary Phenomenon? The Case of Nigeria

This study updated our earlier version of an empirical investigation of the validity of the monetarists’
assertion that inflation is always and everywhere a monetary phenomenon. In our earlier publication in
2013, we employed the autoregressive distributed lag (ARDL) modelling to analyse quarterly timeseries
data that spanned 1970 to 2011 and concluded that inflation was not always and everywhere a
monetary phenomenon. However, following the resizing of data to cover 59 years between 1961 and
2019, the ARDL result in both the short-run and long-run reveal that growth of broad money supply is
the most significant variable that amplifies the general price level. This finding has led us to relax our
earlier position that refuted the monetarists’ view of inflation-money supply relations. Our new findings
have led to the conclusion that inflation is always and everywhere a monetary phenomenon. Thus, we
suggest slow growth in broad money supply as the strategic monetary policy panacea to the menace
of inflation in Nigeria.