Centre for Finance, Credit and Macroeconomics (CFCM)

CFCM 18/07: Inflation targeting and monetary policy in Ghana


An inflation-targeting regime has been in place in Ghana since 2007, but compared to other inflation-targeting countries it has been conspicuously unsuccessful. Since 2013 inflation has persistently exceeded the announced target by four percentage points or more, 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 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.

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Michael Bleaney, Atsuyoshi Morozumi and Zakari Mumuni

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Posted on Wednesday 13th June 2018

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