The Effect of Monetary Policy on Inflation in Ghana

Emmanuel Kwakye Amoah; Foster Awindolla Asaki; Dominic Atogumsekiya Anarigide; Michael Osei

doi:doi:10.11648/j.ijfbr.20230905.12

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The Effect of Monetary Policy on Inflation in Ghana

Emmanuel Kwakye Amoah, Foster Awindolla Asaki, Dominic Atogumsekiya Anarigide, Michael Osei

Published in International Journal of Finance and Banking Research (Volume 9, Issue 5)

Received: 28 August 2023 Accepted: 18 September 2023 Published: 27 September 2023

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Abstract

Ghana is working to reduce the inflation rate, which has become a burden. This study especially focuses on the short- and long-term effects of monetary policy on inflation in order to determine how it affects inflation in Ghana. The scope of the study was expanded to look at how responsive inflation is to monetary policy shocks and the relationship between monetary policy and Ghana's inflation rate. The vector error correction model was utilized as an estimation technique in the study, which utilised secondary data spanning the years 1990 to 2018. The study found that monetary policy, economic growth, and oil prices have a favorable short-term impact on inflation. The findings also showed that while currency rates and oil prices have a negative impact on inflation, monetary policy has a beneficial impact. The study also found a one-way causal relationship between inflation and monetary policy, exchange rate, economic expansion, and oil prices. The empirical results lead to the conclusion that inflationary innovations have a beneficial impact on monetary policy and the currency rate, but a negative one on oil prices. As a monetary policy tool to stop the inflationary trend, the report advises stakeholders and policymakers to reduce the quantity of money.

Published in	International Journal of Finance and Banking Research (Volume 9, Issue 5)
DOI	10.11648/j.ijfbr.20230905.12
Page(s)	79-89
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Monetary Policy, Inflation Rate, Vector Error Correction Model, Causality, Impulse Response Function

References

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APA Style

Emmanuel Kwakye Amoah, Foster Awindolla Asaki, Dominic Atogumsekiya Anarigide, Michael Osei. (2023). The Effect of Monetary Policy on Inflation in Ghana. International Journal of Finance and Banking Research, 9(5), 79-89. https://doi.org/10.11648/j.ijfbr.20230905.12

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ACS Style

Emmanuel Kwakye Amoah; Foster Awindolla Asaki; Dominic Atogumsekiya Anarigide; Michael Osei. The Effect of Monetary Policy on Inflation in Ghana. Int. J. Finance Bank. Res. 2023, 9(5), 79-89. doi: 10.11648/j.ijfbr.20230905.12

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AMA Style

Emmanuel Kwakye Amoah, Foster Awindolla Asaki, Dominic Atogumsekiya Anarigide, Michael Osei. The Effect of Monetary Policy on Inflation in Ghana. Int J Finance Bank Res. 2023;9(5):79-89. doi: 10.11648/j.ijfbr.20230905.12

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@article{10.11648/j.ijfbr.20230905.12,
  author = {Emmanuel Kwakye Amoah and Foster Awindolla Asaki and Dominic Atogumsekiya Anarigide and Michael Osei},
  title = {The Effect of Monetary Policy on Inflation in Ghana},
  journal = {International Journal of Finance and Banking Research},
  volume = {9},
  number = {5},
  pages = {79-89},
  doi = {10.11648/j.ijfbr.20230905.12},
  url = {https://doi.org/10.11648/j.ijfbr.20230905.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20230905.12},
  abstract = {Ghana is working to reduce the inflation rate, which has become a burden. This study especially focuses on the short- and long-term effects of monetary policy on inflation in order to determine how it affects inflation in Ghana. The scope of the study was expanded to look at how responsive inflation is to monetary policy shocks and the relationship between monetary policy and Ghana's inflation rate. The vector error correction model was utilized as an estimation technique in the study, which utilised secondary data spanning the years 1990 to 2018. The study found that monetary policy, economic growth, and oil prices have a favorable short-term impact on inflation. The findings also showed that while currency rates and oil prices have a negative impact on inflation, monetary policy has a beneficial impact. The study also found a one-way causal relationship between inflation and monetary policy, exchange rate, economic expansion, and oil prices. The empirical results lead to the conclusion that inflationary innovations have a beneficial impact on monetary policy and the currency rate, but a negative one on oil prices. As a monetary policy tool to stop the inflationary trend, the report advises stakeholders and policymakers to reduce the quantity of money.},
 year = {2023}
}

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TY  - JOUR
T1  - The Effect of Monetary Policy on Inflation in Ghana
AU  - Emmanuel Kwakye Amoah
AU  - Foster Awindolla Asaki
AU  - Dominic Atogumsekiya Anarigide
AU  - Michael Osei
Y1  - 2023/09/27
PY  - 2023
N1  - https://doi.org/10.11648/j.ijfbr.20230905.12
DO  - 10.11648/j.ijfbr.20230905.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 79
EP  - 89
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20230905.12
AB  - Ghana is working to reduce the inflation rate, which has become a burden. This study especially focuses on the short- and long-term effects of monetary policy on inflation in order to determine how it affects inflation in Ghana. The scope of the study was expanded to look at how responsive inflation is to monetary policy shocks and the relationship between monetary policy and Ghana's inflation rate. The vector error correction model was utilized as an estimation technique in the study, which utilised secondary data spanning the years 1990 to 2018. The study found that monetary policy, economic growth, and oil prices have a favorable short-term impact on inflation. The findings also showed that while currency rates and oil prices have a negative impact on inflation, monetary policy has a beneficial impact. The study also found a one-way causal relationship between inflation and monetary policy, exchange rate, economic expansion, and oil prices. The empirical results lead to the conclusion that inflationary innovations have a beneficial impact on monetary policy and the currency rate, but a negative one on oil prices. As a monetary policy tool to stop the inflationary trend, the report advises stakeholders and policymakers to reduce the quantity of money.
VL  - 9
IS  - 5
ER  -

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Author Information

Emmanuel Kwakye Amoah

Department of Business Studies, Regentropfen College of Applied Sciences, Bolgatanga, Ghana
Foster Awindolla Asaki

Department of Business Studies, Regentropfen College of Applied Sciences, Bolgatanga, Ghana
Dominic Atogumsekiya Anarigide

Department of Economics, SD Dombo University of Business and Integrated Development Studies, Wa, Ghana
Michael Osei

Department of Business Studies, Regentropfen College of Applied Sciences, Bolgatanga, Ghana

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APA Style

Emmanuel Kwakye Amoah, Foster Awindolla Asaki, Dominic Atogumsekiya Anarigide, Michael Osei. (2023). The Effect of Monetary Policy on Inflation in Ghana. International Journal of Finance and Banking Research, 9(5), 79-89. https://doi.org/10.11648/j.ijfbr.20230905.12

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ACS Style

Emmanuel Kwakye Amoah; Foster Awindolla Asaki; Dominic Atogumsekiya Anarigide; Michael Osei. The Effect of Monetary Policy on Inflation in Ghana. Int. J. Finance Bank. Res. 2023, 9(5), 79-89. doi: 10.11648/j.ijfbr.20230905.12

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AMA Style

Emmanuel Kwakye Amoah, Foster Awindolla Asaki, Dominic Atogumsekiya Anarigide, Michael Osei. The Effect of Monetary Policy on Inflation in Ghana. Int J Finance Bank Res. 2023;9(5):79-89. doi: 10.11648/j.ijfbr.20230905.12

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@article{10.11648/j.ijfbr.20230905.12,
  author = {Emmanuel Kwakye Amoah and Foster Awindolla Asaki and Dominic Atogumsekiya Anarigide and Michael Osei},
  title = {The Effect of Monetary Policy on Inflation in Ghana},
  journal = {International Journal of Finance and Banking Research},
  volume = {9},
  number = {5},
  pages = {79-89},
  doi = {10.11648/j.ijfbr.20230905.12},
  url = {https://doi.org/10.11648/j.ijfbr.20230905.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20230905.12},
  abstract = {Ghana is working to reduce the inflation rate, which has become a burden. This study especially focuses on the short- and long-term effects of monetary policy on inflation in order to determine how it affects inflation in Ghana. The scope of the study was expanded to look at how responsive inflation is to monetary policy shocks and the relationship between monetary policy and Ghana's inflation rate. The vector error correction model was utilized as an estimation technique in the study, which utilised secondary data spanning the years 1990 to 2018. The study found that monetary policy, economic growth, and oil prices have a favorable short-term impact on inflation. The findings also showed that while currency rates and oil prices have a negative impact on inflation, monetary policy has a beneficial impact. The study also found a one-way causal relationship between inflation and monetary policy, exchange rate, economic expansion, and oil prices. The empirical results lead to the conclusion that inflationary innovations have a beneficial impact on monetary policy and the currency rate, but a negative one on oil prices. As a monetary policy tool to stop the inflationary trend, the report advises stakeholders and policymakers to reduce the quantity of money.},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - The Effect of Monetary Policy on Inflation in Ghana
AU  - Emmanuel Kwakye Amoah
AU  - Foster Awindolla Asaki
AU  - Dominic Atogumsekiya Anarigide
AU  - Michael Osei
Y1  - 2023/09/27
PY  - 2023
N1  - https://doi.org/10.11648/j.ijfbr.20230905.12
DO  - 10.11648/j.ijfbr.20230905.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 79
EP  - 89
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20230905.12
AB  - Ghana is working to reduce the inflation rate, which has become a burden. This study especially focuses on the short- and long-term effects of monetary policy on inflation in order to determine how it affects inflation in Ghana. The scope of the study was expanded to look at how responsive inflation is to monetary policy shocks and the relationship between monetary policy and Ghana's inflation rate. The vector error correction model was utilized as an estimation technique in the study, which utilised secondary data spanning the years 1990 to 2018. The study found that monetary policy, economic growth, and oil prices have a favorable short-term impact on inflation. The findings also showed that while currency rates and oil prices have a negative impact on inflation, monetary policy has a beneficial impact. The study also found a one-way causal relationship between inflation and monetary policy, exchange rate, economic expansion, and oil prices. The empirical results lead to the conclusion that inflationary innovations have a beneficial impact on monetary policy and the currency rate, but a negative one on oil prices. As a monetary policy tool to stop the inflationary trend, the report advises stakeholders and policymakers to reduce the quantity of money.
VL  - 9
IS  - 5
ER  -

Copy | Download