ABSTRACT
In an attempt to empirically identify the determinants of inflation in Nigeria, this study expands existing paradigm by including structural variables to some monetary and fiscal policy variables. The study sourced secondary quarterly data covering the period 1981Q1 to 2016Q4 from the Central Bank of Nigeria and National Bureau of Statistics on ten variables including Transportation, Rainfall and Utilities. An Autoregressive Distributed Lag- Error Correction Model (ARDL-ECM) was formulated and the estimation technique used was the Fully-Modified Ordinary Least Square Co-integrating Regression method. Preliminary investigations include testing for data normality using descriptive statistics, stationarity test using the Augmented Dickey Fuller and Lag Length Selection using the Akaike Information Criteria, Schwatz Information Criteria and the Hannan Quinn Information Criteria. Thresults show that money supply and agriculture have significant impact on general price movement in the short run while taxation impacts general price movement in the long run. The study however failed to provide evidence to support transportation and rainfall as significant determinants of inflation dynamics in both the short run and long run. Based on the findings of the study, policy recommendations include controlling money supply and boosting agricultural production in order to control prices in the short run while for long run price stability objective, manipulating taxation is recommended
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