Does Money Matter for Inflation in Ghana?

Arto Kovanen

No 2011/274, IMF Working Papers from International Monetary Fund

Abstract: Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters). On the other hand, currency depreciation and demand pressures (as measured by the output gap) are shown to be important predictors of future price changes. Inflation inertia is high and inflation expectations are largely based on backward-looking information, suggesting that inflation expectations are not well anchored and hence more is needed to strengthen the credibility of Ghana's inflation-targeting regime.1

Keywords: WP; monetary policy; money demand; inflation expectation; monetary policy credibility; inflation-targeting; monetary policy implementation; gap indicator; inflation-targeting arrangement; inflation objective; reaction function; Inflation; Inflation targeting; Monetary base; Demand for money; Output gap; Africa (search for similar items in EconPapers)
Pages: 23
Date: 2011-11-01
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Citations: View citations in EconPapers (4)

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