Inflation In Ghana Research Articles

Fiscal deficits, output growth and inflation targets in Ghana

Inflation appears to be the macro problem for which no antidote has been found under the Economic Recovery Programme. It is possible that either a wrong diagnosis has been made of the problem, or that certain factors within the economy are preventing inflation from staying within target levels. Using an error correction model (ECM), the paper estimates an inflation equation for Ghana. The convenience of this model is in the fact that all the data series exhibit an autoregressive scheme of order one: that is, they are I(1) series. In such an instance the Granger-Engle Theorem shows that the ECM provides the most efficient model. Further, the ECM unveils some of the short-run dynamics which are missing in other estimation techniques. The results of the econometric regression show that inflation in Ghana, either in the long run or short run, is influenced more by output volatility than by monetary factors. An examination is made of the consistency of fiscal deficit. The hypothesis is that an unsustainable fiscal policy would make government miss some macroeconomic targets. It is shown that in 1985 and 1989, fiscal policy was consistent. Inflation was well within target in 1985. For 1986–1988, the government did not maintain consistent fiscal deficits, and inflation in those years was well above targets. It is recommended that to control inflation in Ghana, more attention should be paid to supply factors. Further, government should pursue consistent fiscal policies.

The Role of Suppliers' Credits in the Industrialization of Ghana

Previous articleNext article No AccessThe Role of Suppliers' Credits in the Industrialization of GhanaLeslie E. GraysonLeslie E. Grayson Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 21, Number 3Apr., 1973 Article DOIhttps://doi.org/10.1086/450648 Views: 7Total views on this site Citations: 1Citations are reported from Crossref Copyright 1973 The University of ChicagoPDF download Crossref reports the following articles citing this article:John Struthers Inflation in Ghana (1966-78): A Perspective on the Monetarist v Structuralist Debate, Development and Change 12, no.22 (Apr 1981): 177–213.https://doi.org/10.1111/j.1467-7660.1981.tb00094.x