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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/9385

Title: An empirical analysis of the determinants of trade balance in post-liberalisation Ghana
Authors: Akoto, Linda
Issue Date: 25-Oct-2016
Abstract: The study investigates the determinants of trade balance in post-liberalisation Ghana. The Autoregressive Distributed Lag Bounds test approach to cointegration was used for the estimation. Further, the study employed the variance decomposition and impulse response functions to investigate the dynamic simulations of the variables included in the estimated model. The results show evidence of an equilibrium long-run relationship (cointegration) between trade balance, exchange rate, household consumption expenditure, government consumption expenditure, money supply, foreign income, domestic prices and agricultural growth rate. The study finds that in the long-run increasing levels of household consumption expenditure, government consumption expenditure, money supply, and domestic prices worsens Ghana‟s trade balance whilst foreign income improves it. Exchange rate and agricultural growth rate were insignificant in the long-run. The short-run result also shows that exchange rate, household consumption expenditure, government consumption expenditure and money supply cause a decline in Ghana‟s trade balance. Foreign income, agricultural growth rate and domestic prices were insignificant in the short-run. The long-run and short-run effects of exchange rate on the trade balance show the absence of the Marshall-Lerner condition and the J-curve effect. Further the variance decomposition results show that innovations in household consumption expenditure highly contributed to the forecast error of Ghana‟s trade balance compared to other explanatory variables. The findings and recommendations of the study provide vital information for trade policy reforms
Description: A thesis submitted to the Department of Economics, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the degree of Master of Philosophy (Economics), 2016
URI: http://hdl.handle.net/123456789/9385
Appears in Collections:College of Arts and Social Sciences

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