Oil Price fluctuations and it impact on Economic Growth: A DSGE approach

Giovanni Di Bartolomeo (), Eric Bondzie and Gabriel Obed Fosu

MPRA Paper from University Library of Munich, Germany

Abstract: Ghana is poised to be one of the fastest growing economies in Sub-Saharan Africa because of its emerging oil and gas industry. Ghana’s discovery of oil in commercial quantities in 2007 and its commencement of production in 2010 are expected to have an impact on the economy. To investigate these, we estimated a dynamic stochastic general equilibrium (DSGE) model based on the features of the Ghanaian Economy. We then examined the persistent effects of world oil price and monetary policy shocks (money supply-interest rate induced) on economic growth in Ghana. We realized that, a shock on interest rate leads to a sharp fall in prices which reflects the impact of the decrease in interest rate on the marginal cost. There is a paradoxical effect of a negative interest rate on total money supply. We also showed that a positive output shock has the same effect on consumption, investment, prices and wages as in the case of interest rate shock.

Keywords: DSGE model; Ghana; Interest rate; Output; Oil Price (search for similar items in EconPapers)
JEL-codes: C61 E31 E32 E52 O55 (search for similar items in EconPapers)
Date: 2014-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in International Journal of Academic Research in Business and Social Sciences 2.4(2014): pp. 217-242

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/69231/1/MPRA_paper_69231.pdf original version (application/pdf)

Related works:
Journal Article: Oil Price Fluctuations and it Impact on Economic Growth: A Dsge Approach (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:69231

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().