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A Small Macroeconmetric Model Of Trade And Inflation In Ghana

  • Donyina-Ameyaw, Samuel

    (University of Warwick)

Registered author(s):

    This paper contains an empirical investigation of the effects of trade and inflation on a conventional macroeconometric model for Ghana. First, the results corroborate the findings of the Fund that both devaluation and credit restraint are effective in addressing the balance of payment issues facing Ghana. Second, the direction and time pattern of the effects of these two policy experiments are different. Third, further depreciation of the domestic currency is unfavourable to the cause of curbing inflation in Ghana. It rather leads to price increases and is a source of fueling inflation, and could lead to a spiral of inflation through the agitation for higher wages by employees.

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    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp696.pdf
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    Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 696.

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    Length: 37 pages
    Date of creation: 2004
    Date of revision:
    Handle: RePEc:wrk:warwec:696
    Contact details of provider: Postal: CV4 7AL COVENTRY
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    Fax: +44 (0) 2476 523032
    Web page: http://www2.warwick.ac.uk/fac/soc/economics/

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    7. Cushman, David O. & Zha, Tao, 1997. "Identifying monetary policy in a small open economy under flexible exchange rates," Journal of Monetary Economics, Elsevier, vol. 39(3), pages 433-448, August.
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    17. P. Krugman & L. Taylor, 1976. "Contractionary Effects of Devaluations," Working papers 191, Massachusetts Institute of Technology (MIT), Department of Economics.
    18. Harvey, A C, 1980. "On Comparing Regression Models in Levels and First Differences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(3), pages 707-20, October.
    19. David Gruen & Jacqueline Dwyer, 1995. "Are Terms of Trade Rises Inflationary?," RBA Research Discussion Papers rdp9508, Reserve Bank of Australia.
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    21. Sundararajan, V., 1986. "Exchange rate versus credit policy : Analysis with a monetary model of trade and inflation in India," Journal of Development Economics, Elsevier, vol. 20(1), pages 75-105.
    22. Jere Behrman & James A. Hanson, 1979. "The Use of Econometric Models in Developing Countries," NBER Chapters, in: Short-Term Macroeconomic Policy in Latin America, pages 1-38 National Bureau of Economic Research, Inc.
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