Financial Deepening in Ghana; Does Macroeconomics Matter

Samuel Erasmus Alnaa and Juabin Matey

MPRA Paper from University Library of Munich, Germany

Abstract: Financial deepening plays a pivotal role in fostering economic growth, alleviating poverty, and mitigating social inequalities. Employing the Vector Autoregressive Model (VAR), this study examines the implications of per capita gross domestic product (GDP), interest rates, and inflation rates for financial deepening (FD) in Ghana. GDP per capita and interest rates exhibit statistically significant impacts on FD in Ghana, whereas inflation exerts an insignificant inverse effect. The statistically significant influence of GDP per capita and interest rates underscores their significance as robust favourable determinants of financial sector development in Ghana. Hence, policymakers are entreated to closely monitor the behaviour of these macroeconomic variables that positively influence financial deepening, as they play crucial roles in fostering economic growth.

Keywords: Financial Deepening; GDP per capita; Economic Growth; Interest Rate; Inflation; VAR (search for similar items in EconPapers)
JEL-codes: E31 E37 E43 E44 E62 (search for similar items in EconPapers)
Date: 2024-02-27, Revised 2024-04-02
New Economics Papers: this item is included in nep-fdg
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Published in International Journal of Scientific Research in Multidisciplinary Studies 04.10(2024): pp. 39-46

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:120974

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