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An Empirical Investigation Into The Effect Of Monetary Policy And Inflation On The Exchange Rate In Ghana, Precious Wedaga Allor
An Empirical Investigation Into The Effect Of Monetary Policy And Inflation On The Exchange Rate In Ghana, Precious Wedaga Allor
2019 Awards for Excellence in Student Research and Creative Activity – Documents
The Ghanaian Cedi has recently experienced persistent depreciation against it's major trading partners. This paper investigates the role inflation and monetary policy plays in the persistent depreciation. The paper makes use of the ARDL and Bounds test of co-integration as well as the Toda & Yamamoto (1995) Augmented Granger Causality test to determine the long and short run dynamics of the impact of monetary policy and inflation on exchange rates in Ghana, using data ranging from 1970 to 2017. The paper finds short-run depreciation effect of contractionary monetary policy on the exchange rate, reflecting the exchange rate puzzle. The long …