A Modelling of Ghana's Inflation Experience: 1960–2003
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Date
2007-08-27
Authors
Mathew Kofi Ocran
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
The study sought to ascertain the key determinants of inflation in Ghana for the past 40
years. Stylized facts about Ghana’s inflation experience indicate that since the country’s
exit from the West African Currency Board soon after independence, inflation
management has been ineffective despite two decades of vigorous reforms. Using the
Johansen cointegration test and an error correction model, the paper identified inflation
inertia, changes in money and changes in Government of Ghana treasury bill rates, as
well as changes in the exchange rate, as determinants of inflation in the short run. Of
these, inflation inertia is the dominant determinant of inflation in Ghana. It is therefore
suggested that to make treasury bill rates more effective as a nominal anchor, inflationary
expectations ought to be reduced considerably.
Description
HG 1382.O35 2007
Keywords
Inflation (Finance) - Ghana , Inflation (Finance)