Modelling the effect of exchange rate on inflation in Ghana

Samuel Yeboah

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the exchange rate-inflation nexus for Ghana during the period 1964 to 2013 using annual data. The analysis of the results performed by using the Johansen test (JH), Vector Error Correction (VECM) test, and the Ordinary least square test (OLS). The findings of the result based on the JH, and VECM tests indicate stable long run and short run link between exchange rates and inflation. The results of the OLS test indicate there is positive link between exchange rates and inflation. Policy makers should take into account the findings of the study in order to control inflation. Future studies should consider causality and structural break issues as well as panel study.

Keywords: Inflation; exchange rates; money supply; long run (search for similar items in EconPapers)
JEL-codes: E1 F31 O24 P24 P44 (search for similar items in EconPapers)
Date: 2017-03-25
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