What effect does the Monetary Policy of Ghana have on the country’s GDP growth? From 1980 to 2015, a retrospective time series analysis
Journal Title: Journal of Economics, Finance and Management Studies - Year 2022, Vol 5, Issue 03
Abstract
Using data for the annual period series from 1980 to 2015, this article explores the impact of the Bank of Ghana's monetary policy and whether it has a major impact on Ghana's economic growth. The study used the Ordinary Least Square (OLS) retrieval line model, and the retrospective analysis was done using the SPSS statistical software with F-Statistic and T Statistic. GDP was a model-dependent variable in this study, while income, interest rate, and inflation were independent / descriptive variables. The findings showed that at 5% significant level, both interest rates and income were statistically insignificant, whiles inflation was statistically significant at 5% level, in that, a 1% increase in inflation resulted in a 6.9% drop in GDP. The impact of inflation on GDP has been negative. Fisher (1993), Ghosh and Philips (1998), and Neil (1999) are examples of similar verified investigations (2000). The corrected R2 value of 0.365 clearly reveals that the Bank of Ghana's overall banking policy contributed roughly 36.5 percent to economic growth, whereas other unnamed factors accounted for a large difference in GDP of 65.5 percent. As a result, my policy advice is that the Ghanaian central bank employ suitable monetary policy tools to better control inflation and decrease it to a single digit, as well as pay attention to details in other real economic sector indicators to raise the rate of growth. Information on the Bank of Ghana's (BOG) overall financial strategy on policies that contribute to economic stability, Same should be made available to the Ministry of Finance and Economic Planning (MOFEP) and industry stakeholders.
Authors and Affiliations
Dr. Patrick K Ansah
Keywords
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- EP ID EP706941
- DOI 10.47191/jefms/v5-i3-10
- Views 167
- Downloads 0
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