Economics at your fingertips  

Public Debt and Inflation: Empirical Evidence from Ghana

Akingbade Aimola and Nicholas Odhiambo ()

No AESRIWP06, Working Papers from African Economic and Social Research Institute (AESRI)

Abstract: This paper investigates the impact of public debt on inflation in Ghana using annual data during the period 1983-2018. The study uses the Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration and an error correction model to examine this linkage. The cointegrating regression results reveal evidence of a stable long-run relationship between inflation and the explanatory variables in the presence of a structural break. The findings also show a positive and significant impact of public debt on inflation. These results were found to hold, irrespective of whether the regression was conducted in the short run or the long run. The study confirms the presence of the inflationary effects of public debt in Ghana. The government should, therefore, be prudent when considering increases in public debt to minimise volatility in inflation and its associated risks to the economy.

Pages: 28 pages
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Revised version, 2022 (application/pdf)

Related works:
Working Paper: Public debt and inflation: Empirical evidence from Ghana (2021) Downloads
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:

Access Statistics for this paper

More papers in Working Papers from African Economic and Social Research Institute (AESRI)
Bibliographic data for series maintained by Prof Nicholas M Odhiambo ().

Page updated 2022-08-28
Handle: RePEc:afa:wpaper:aesriwp06