Exchange Rate Pass-Through in Ghana

Siaw Frimpong, Anokye Mohammed Adam

Abstract


The paper examines the effect of exchange rate changes on consumer prices in Ghana using vector autoregression (VAR) models. Using a data set covering the periodn1990M01–2009M02, we find that the exchange rate pass-through to inflation is ‘incomplete’ and decreasing in Ghana. Our empirical results indicate a low but significant pass-through in the short run. We argue that the findings reflect the impact of increased openness and tighter monetary policy pursue by the central bank over the period


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