What is the effect of Inflation on Manufacturing Sector Productivity in Ghana?

Mawufemor Bans-Akutey, Isaac Yaw Deh and Faisal Mohammed

MPRA Paper from University Library of Munich, Germany

Abstract: Using annual time series data for Ghana, the current study investigates the effect of inflation on manufacturing sector productivity for the period 1968-2013. The empirical verification is done by using the Johansen test (JT), the Vector Error Correction Model (VECM), and the Ordinary Least Squares (OLS) regression test. The results indicate significant stable long run relationship between inflation and manufacturing sector productivity. However, there is insignificant short run link between inflation and manufacturing sector productivity in the VECM. The results of the OLS test indicate negative significant link between inflation and manufacturing sector productivity. The findings suggest that inflation has led to a decrease in manufacturing sector productivity. Policy makers should manage inflation very well in order to improve manufacturing sector productivity. Future study should examine the current topic accounting for causality and structural breaks issues since the present study did not consider these issues.

Keywords: Manufacturing sector productivity; Inflation; Long run; Short run (search for similar items in EconPapers)
JEL-codes: E31 L60 P24 (search for similar items in EconPapers)
Date: 2016-11-18
New Economics Papers: this item is included in nep-afr, nep-eff and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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