Oil Price Shocks, Monetary Policy and Aggregate Demand in Ghana

Jumah, Adusei and Pastuszyn, Georg (June 2007) Oil Price Shocks, Monetary Policy and Aggregate Demand in Ghana. IHS Economics Series 212


Download (432kB) | Preview

Abstract or Table of Contents

Abstract: The current study examines the relationship between the world oil price and aggregate demand in a developing country, Ghana, via the interest rate channel by means of cointegration analysis. Results of the study indicate that oil price - by impacting the price level positively - negatively impacts real output. The results also indicate that monetary policy is initially eased in response to a surge in the price of oil in order to lessen any growth consequences, but at the cost of higher inflation. The ensuing higher inflation, however, prompts a subsequent tightening of monetary policy leading to a further decline in output. In addition, output does not revert quickly to its initial level after an oil price shock, but declines over anextended period.;

Item Type: IHS Series
Keywords: 'Aggregate demand' 'Inflation' 'Monetary policy' 'Oil'
Classification Codes (e.g. JEL): C32, E50, O13
Status: Published
Date Deposited: 26 Sep 2014 10:38
Last Modified: 03 Mar 2019 07:07
URI: http://irihs.ihs.ac.at/id/eprint/1775

Actions (login required)

View Item View Item