Econometric analys of relationship between exchange rate and inflation: A case study of Ghana
Date
2020-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The purpose of this study is to predict inflation rates for Ghana, based on past
exchange rate data. The project was motivated by the instability of general price
levels in Ghana and the detrimental effects it has on the economy. The study seeks to
determine if inflation rates in Ghana be predicted based on past exchange rate data.
Forecasting inflation rates will aid the government to devise more precise policies to
tackle the expected rates and assist individuals with contingent planning.
The study uses a quantitative research method to examine the subject matter, in
the form of a time series regression analysis. The data employed has a monthly
frequency and spans from 1999 to 2018. Quantitative data for the intended analysis
was retrieved from the World Bank and Bank of Ghana, however data from past
literature journals, reports, and books were also analysed and discussed.
A negative correlation between exchange rate and inflation is expected from the
analysis such that an appreciation; increase in the value, of the Ghanaian Cedi would
yield lower inflation rates.
Description
Undergraduate thesis submitted to the Department of Business Administration, Ashesi University, in partial fulfillment of Bachelor of Science degree in Business Administration, May 2020
item.page.type
Thesis
item.page.format
Keywords
exchange rate, inflation rate, Ghana, macroeconomic variables, economic policy