The Real Exchange Rate Regime and Economic Growth in Ghana

Abstract

An empirical research that aims at investigating the interplay between real exchange rate and economic growth is imperative in the study of modern international economics. The real exchange rate regime plays a critical role in the economic growth of a country. The research focusses on the interaction that exist between Real Exchange Rate and Economic Growth in Ghana. Real GDP was used as a measure of Economic Growth Rate. Results from the empirical analysis revealed a statistically significant and positive association existing between real exchange rate and the growth of Ghana’s economy (Real GDP). This affirms the major hypothesis. Results from the data analysis also showed a statistically significant and positive association between labour force and economic growth. Results from the analysis also revealed an inverse relation between government’s consumption expenditure patterns and economic growth. The study finally considered the theoretical and practical contributions of the study.