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. Closed Series > Working Paper Series > IHS Economics Series 212

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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: https://irihs.ihs.ac.at/id/eprint/1775

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