This study examined the impact of money supply on inflation in Nigeria between 1980 and 2009, using Vector Error Correction Mode (VECM). The data for the variables were sourced from CBN statistical Bulletin. The results of the test established a significant long run positive relationship between money supply and inflation in Nigeria. Based on this finding, the study recommended that, government intensify the effort to combat inflation by encouraging the monetary authority to put in place policies measures that are gear toward reducing the volume of money in circulation in Nigeria.
Keywords: Inflation, Money Supply, Nigeria, VECM
