Inflation Targeting and Monetary Policy in Ghana

Bleaney, Michael; Morozumi, Atsuyoshi; Mumuni, Zakari

Abstract

An inflation-targeting regime has been in place in Ghana since 2007, but the inflation rate has remained persistently high. During the 2007–2017 period, inflation exceeded the announced target by four percentage points on average, despite the target never falling below a relatively unambitious 8% per annum. We investigate whether the poor conduct of monetary policy is responsible for this outcome, and find that it is not. Monetary policy reaction functions are similar to those estimated for countries with successful monetary policies, and interest rates respond in the theoretically recommended way to inflation shocks.

Citation

Bleaney, M., Morozumi, A., & Mumuni, Z. (2020). Inflation Targeting and Monetary Policy in Ghana. Journal of African Economies, 29(2), 121–145. https://doi.org/10.1093/jae/ejz021

• Journal Article Type: Article
• Acceptance Date: Apr 18, 2019
• Online Publication Date: May 15, 2019
• Publication Date: 2020-03
• Deposit Date: Feb 17, 2020
• Publicly Available Date: May 16, 2021
• Journal: Journal of African Economies
• Print ISSN: 0963-8024
• Electronic ISSN: 1464-3723
• Publisher: Oxford University Press
• Peer Reviewed: Peer Reviewed
• Volume: 29
• Issue: 2
• Pages: 121–145
• DOI: https://doi.org/10.1093/jae/ejz021
• Keywords: Economics and Econometrics; Development
• Public URL: https://nottingham-repository.worktribe.com/output/3979659
• Publisher URL: https://academic.oup.com/jae/advance-article/doi/10.1093/jae/ejz021/5489528
• Additional Information: This is a pre-copyedited, author-produced version of an article accepted for publication in Journal of African Economies following peer review. The version of record Michael Bleaney, Atsuyoshi Morozumi, Zakari Mumuni, Inflation Targeting and Monetary Policy in Ghana, Journal of African Economies is available online at: https://doi.org/10.1093/jae/ejz021.