Does Money Matter for Inflation in Ghana?

24 Pages Posted: 20 Dec 2011

See all articles by Arto Kovanen

Arto Kovanen

International Monetary Fund (IMF) - African Department

Date Written: November 2011


Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters). On the other hand, currency depreciation and demand pressures (as measured by the output gap) are shown to be important predictors of future price changes. Inflation inertia is high and inflation expectations are largely based on backward-looking information, suggesting that inflation expectations are not well anchored and hence more is needed to strengthen the credibility of Ghana’s inflation-targeting regime.

Keywords: Capital markets, Cross country analysis, Demand for money, Economic models, Emerging markets, Inflation targeting, Interest rates, Monetary policy

Suggested Citation

Kovanen, Arto, Does Money Matter for Inflation in Ghana? (November 2011). IMF Working Paper No. 11/274, Available at SSRN:

Arto Kovanen (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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