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The Effect of Monetary Policy on Inflation in Ghana

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.

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

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.

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

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

Copyright © 2023 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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