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Inflation targeting and monetary policy in Ghana

Michael Bleaney, Atsuyoshi Morozumi () and Zakari Mumuni

No 2018/07, Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: An inflation-targeting regime has been in place in Ghana since 2007, but compared to other inflation-targeting countries it has been conspicuously unsuccessful. Since 2013 inflation has persistently exceeded the announced target by four percentage points or more, despite the target never falling below a relatively unambitious 8% per annum. We investigate whether the poor conduct of monetary policy is responsible for this outcome, and find that is not. Monetary policy reaction functions are similar to those estimated for countries with successful monetary policies, and interest rates respond in the theoretically recommended way to inflation shocks.

Keywords: expectations; inflation targeting; interest rates. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-knm, nep-mac and nep-mon
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:18/07

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