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Real exchange rate and economic growth in Ghana

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  • Mwinlaaru, Peter Yeltulme
  • Ofori, Isaac Kwesi

Abstract

The study sought to determine effect of real effective exchange rate on economic growth in Ghana using annual data from 1984 to 2014. Data was sourced from the databases of World Bank, Bank of Ghana annual bulletins, and Ghana Ministry of Finance and Economic Planning. Using the ARDL cointegration estimation technique, the study found that real exchange rate and economic growth are cointegrated. The result suggests that real exchange rate exerts a positive and statistically significant effect on economic growth in both the long-run and short-run. Thus, there is the need to ensure exchange rate stability in the Ghanaian economy to help boost economic growth.

Suggested Citation

  • Mwinlaaru, Peter Yeltulme & Ofori, Isaac Kwesi, 2017. "Real exchange rate and economic growth in Ghana," MPRA Paper 82405, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82405
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    1. Ashok Babubudjnauth & Boopen Seetanah, 2021. "An empirical analysis of the impacts of real exchange rate on GDP, manufacturing output and services sector in Mauritius," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1657-1669, April.

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    More about this item

    Keywords

    Economic growth; Real exchange rate; Autoregressive Distributed Lag (ARDL) model;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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