Abstract Purpose: This study re-examines the dynamic relationships among inflation, exports, and economic growth in Nigeria over the period 1980–2023. The objective is to address the conflicting evidence in the literature regarding the inflation-growth nexus and the Export-Led Growth (ELG) hypothesis, while also investigating how inflation impacts export competitiveness within an integrated dynamic framework. Design/methodology/approach: The study employs the Autoregressive Distributed Lag (ARDL) bounds testing approach and Error Correction Model (ECM) to estimate both short-run and long-run relationships. Pairwise Granger Causality tests are conducted to determine causal directions among the variables. The analysis utilizes annual time series data from the Central Bank of Nigeria and World Bank databases spanning 44 years (1980–2023). Findings: The ARDL bounds test confirms a robust long-run cointegrating relationship among real GDP, inflation, and exports. Long-run estimates reveal that inflation exerts a negative and statistically significant effect on real GDP (coefficient = -0.217, p < 0.05), while exports demonstrate a positive and highly significant impact (coefficient = 0.342, p < 0.01). Short-run ECM results indicate that changes in exports translate immediately into growth gains (0.141, p < 0.01), whereas inflation changes exert contractionary effects (-0.089, p < 0.05). Granger causality tests confirm bidirectional causality between exports and growth, supporting both ELG and Growth-Led Export (GLE) hypotheses. Research limitations/implications: The study focuses on aggregate export data rather than sectoral export composition (oil versus non-oil). Future research could disaggregate exports to identify sector-specific drivers and thresholds for inflation's impact on growth. Practical implications: Policy interventions should prioritize non-oil export diversification, stable trade policies, and monetary policy frameworks that address structural inflationary pressures. The bidirectional causality between exports and growth suggests that export promotion policies generate positive feedback effects on overall economic expansion. Originality: This study integrates inflation's impact on export competitiveness within a unified ARDL framework, addressing a gap in the literature where these variables are typically treated in isolation. The finding of a significant negative long-run effect of inflation on growth contrasts with recent Nigerian studies, providing fresh empirical evidence for policy formulation. JEL Classification Codes: E31, F14, O47.
YUNUSA et al. (Thu,) studied this question.