What is the effect of inflation on consumer spending behaviour in Ghana?

Gabriel Effah Nyamekye and Eugene Adusei Poku

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the effect of inflation on consumer spending behaviour in Ghana during the period 1964 to 2013 using annual data. The analysis of the results was done using Ordinary least square test (OLS), the Johansen test (JH), and Vector Error Correction (VECM) test. The findings of the studies based on the JH tests showed stable significant long run relationship between inflation and consumer spending behaviour. The findings of the study shows significant short run relationship between inflation and consumer spending using the VECM. The results of the OLS test show there is positive relationship between inflation and consumer spending behaviour. Policy makers should take into account the findings of the study in managing the economy. Future studies on causality and structural break are worth undertaking.

Keywords: Inflation; consumer spending behaviour; long run; short run (search for similar items in EconPapers)
JEL-codes: D11 D12 E31 L67 L68 P24 P44 P46 (search for similar items in EconPapers)
Date: 2017-03-31
New Economics Papers: this item is included in nep-mac
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