Impact of Macroeconomic Factors on Economic Growth in Ghana: A Cointegration Analysis
AbstractThe problem of the study is to ascertain the major macroeconomic factors that would drive Ghana’s real per capita GDP growth (economic growth) and also determine which ways these factors influence economic policy formulation and implementation. As a result, this study examines the long-run macroeconomic factors of economic growth in Ghana using Johansen approach to cointegration which is more appropriate and efficient for determining the number of cointegrating vectors without relying on an arbitrary normalization. The study period spanned from 1980 to 2010. The time series properties of the data were, first, analyzed using the Augmented Dickey Fuller (ADF) test. The empirical results derived indicate that all the variables of interest were stationary after their first differencing. The study found cointegration relationship between real GDP per capita (economic growth) and its macroeconomic factors. The policy recommendation among others is that the government should be able to generate more revenue domestically than relying on foreign aid.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences in its journal International Journal of Academic Research in Accounting, Finance and Management Sciences.
Volume (Year): 3 (2013)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal
Ghana; FDI; GDP; Inflation; Economic growth;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Frimpong, Joseph Magnus & Oteng-Abayie, Eric Fosu, 2006. "Bivariate causality analysis between FDI inflows and economic growth in Ghana," MPRA Paper 351, University Library of Munich, Germany, revised 09 Oct 2006.
- Fischer, Stanley, 1993.
"The role of macroeconomic factors in growth,"
Journal of Monetary Economics,
Elsevier, vol. 32(3), pages 485-512, December.
- Adenutsi, Deodat E., 2011.
"Financial development, international migrant remittances, and endogenous growth in Ghana,"
29330, University Library of Munich, Germany.
- Deodat E. Adenutsi, 2011. "Financial development, international migrant remittances and endogenous growth in Ghana," Studies in Economics and Finance, Emerald Group Publishing, vol. 28(1), pages 68-89, March.
- Robert J. Barro, 2003.
"Determinants of Economic Growth in a Panel of Countries,"
CEMA Working Papers
505, China Economics and Management Academy, Central University of Finance and Economics.
- Robert J. Barro, 2003. "Determinants of Economic Growth in a Panel of Countries," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 231-274, November.
- Robert J. Barro, 1989.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- Ross Levine, 1999. "Financial development and growth: where do we stand?," Estudios de Economia, University of Chile, Department of Economics, vol. 26(2 Year 19), pages 113-136, December.
- Levine, Ross & Zervos, Sara J, 1993. "What We Have Learned about Policy and Growth from Cross-Country Regressions?," American Economic Review, American Economic Association, vol. 83(2), pages 426-30, May.
- Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-30, Jan.-Feb..
- Stanley Fischer & Franco Modigliani, 1978.
"Towards An Understanding of the Real Effects and Costs of Inflation,"
NBER Working Papers
0303, National Bureau of Economic Research, Inc.
- Stanley Fischer & Franco Modigliani, 1978. "Towards an understanding of the real effects and costs of inflation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 114(4), pages 810-833, December.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Easterly, William & Levine, Ross, 1997.
"Africa's Growth Tragedy: Policies and Ethnic Divisions,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1203-50, November.
- Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
- Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
- Adenutsi, Deodat E., 2007. "Effects of trade openness and foreign direct investment on industrial performance in Ghana," MPRA Paper 37116, University Library of Munich, Germany.
- Fosu, Augustin Kwasi, 1990. "Export composition and the impact of exports on economic growth of developing economies," Economics Letters, Elsevier, vol. 34(1), pages 67-71, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.