Browsing by Author "Alhassan, Mohammed"

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    Inflation targeting, inflation and economic growth in Ghana (1980-2013): an empirical investigation
    (MAY 2016) Alhassan, Mohammed
    The Bank of Ghana (BoG) adopted inflation targeting as a nominal anchor in 2007 to address macroeconomic stability. Given Ghana’s chequered history of high volatile inflation and the recent adoption of inflation targeting as an important monetary policy instrument, it is significant to investigate the effect of inflation targeting and inflation on economic growth in Ghana. However, the only known study that investigated the effect of inflation targeting and inflation on economic growth in Ghana did not take inflation volatility into account. This study examines the impact of inflation targeting, inflation level and inflation volatility on economic growth in Ghana. The study used Autoregressive Distributed Lag (ARDL) model to analyze time series data on inflation and real per capita GDP from 1980 – 2013. The results indicate that inflation targeting has a positive and statistically significant impact on economic growth in the long-run, inflation level has a weak negative and significant impact on economic growth in the short-run and inflation volatility has a negative and significant impact on economic growth in both short-term and long-term. Therefore, it is recommended that BoG should strengthen inflation targeting by ensuring a stable financial environment as well as monetary policy accountability and credibility. Also, Ghana needs a comprehensive mix of macroeconomic reforms. Thus the BoG and Ministry of Finance (MoF) should implement interest rate and tax policies that induce investment efficiency in the economy
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    Inflation targeting, inflation and economic growth in Ghana (1980-2013): an empirical investigation
    (May 2016) Alhassan, Mohammed
    The Bank of Ghana (BoG) adopted inflation targeting as a nominal anchor in 2007 to address macroeconomic stability. Given Ghana’s chequered history of high volatile inflation and the recent adoption of inflation targeting as an important monetary policy instrument, it is significant to investigate the effect of inflation targeting and inflation on economic growth in Ghana. However, the only known study that investigated the effect of inflation targeting and inflation on economic growth in Ghana did not take inflation volatility into account. This study examines the impact of inflation targeting, inflation level and inflation volatility on economic growth in Ghana. The study used Autoregressive Distributed Lag (ARDL) model to analyze time series data on inflation and real per capita GDP from 1980 – 2013. The results indicate that inflation targeting has a positive and statistically significant impact on economic growth in the long-run, inflation level has a weak negative and significant impact on economic growth in the short-run and inflation volatility has a negative and significant impact on economic growth in both short-term and long-term. Therefore, it is recommended that BoG should strengthen inflation targeting by ensuring a stable financial environment as well as monetary policy accountability and credibility. Also, Ghana needs a comprehensive mix of macroeconomic reforms. Thus the BoG and Ministry of Finance (MoF) should implement interest rate and tax policies that induce investment efficiency in the economy.