EconPapers    
Economics at your fingertips  
 

Inflation and inflation uncertainty in Ghana

Eric Oteng-Abayie () and Samuel Kwame Doe
Additional contact information
Samuel Kwame Doe: Department of Economics, Kwame Nkrumah University of Science and Technology, Ghana

E3 Journal of Business Management and Economics., 2013, vol. 4, issue 12, 259-266

Abstract: The study investigates the relationship between inflation and inflation uncertainty for the period 1984-2011. The work uses the monthly Consumer Price Index to proxy inflation. The General Autoregressive Heteroscedasticity (GARCH) model is employed to estimate the conditional variability of inflation. The work uses two approaches to find out the relationship between inflation and inflation uncertainty. The first one is the two-step procedure of Granger causality test, which obtains generated variables in stage one as dependent variable in the second stage. The second procedure involves inclusion of conditional variance and inflation in the mean and conditional variance equations respectively, and Full Information Maximum Likelihood (FIML) technique is used in the estimation of the two equations. The two methods established the same result that in high inflationary periods, inflation uncertainty also rises and that inflation uncertainty causes inflation, which is in support of Cukierman-Meltzer hypothesis. Therefore, decreasing inflation uncertainty is expected to reduce inflation.

Keywords: Inflation; Consumer; Uncertaintiy; Regression; Variance. (search for similar items in EconPapers)
Date: 2013-12
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://e3journals.org/cms/articles/1386653460_Eric.pdf Full text

Related works:
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:etr:series:v:4:y:2013:i:12:p:259-266

Access Statistics for this article

More articles in E3 Journal of Business Management and Economics. from E3 Journals
Bibliographic data for series maintained by Andrew Godwin ().

 
Page updated 2021-06-14
Handle: RePEc:etr:series:v:4:y:2013:i:12:p:259-266