This study investigates the dynamic relationship between unemployment and inflation in Nigeria, a country facing persistent macroeconomic challenges despite its abundant resources. Grounded in Classical, Keynesian, Neo-Keynesian, and Rational Expectations theories, the paper explores theoretical and empirical perspectives on the coexistence of rising unemployment and inflation—commonly referred to as stagflation. Utilizing secondary time series data from the Central Bank of Nigeria and the National Bureau of Statistics, the study employs an ex-post facto research design and applies the Augmented Dickey-Fuller test, Johansen co-integration, and Vector Error Correction Model (VECM) to examine the variables. Empirical results reveal a statistically significant positive relationship between inflation and unemployment, contradicting the traditional Phillips Curve trade-off. Government expenditure also exhibits a positive and significant correlation with unemployment, indicating inefficiencies in fiscal policy. These findings underscore the limitations of conventional macroeconomic tools in addressing Nigeria’s unique structural challenges and call for more transparent, accountable, and growth-oriented policy frameworks. The study concludes with recommendations for balanced macroeconomic strategies that can foster inclusive growth, job creation, and price stability.            

Keyword: Inflation, Gross Domestic Product, Unemployment, Government Expenditure,