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A Small Macroeconometric Model of Trade and Inflation in Ghana

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  • Ameyaw, Samuel Donyina

Abstract

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

Suggested Citation

  • Ameyaw, Samuel Donyina, 2004. "A Small Macroeconometric Model of Trade and Inflation in Ghana," Economic Research Papers 269590, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269590
    DOI: 10.22004/ag.econ.269590
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