Money supply, budget deficit and inflation dynamics in Ghana: An empirical investigation

Duodu, Emmanuel; Baidoo, Samuel Tawiah; Yusif, Hadrat; Frimpong, Prince Boakye

doi:10.1080/23311975.2022.2043810

Cited by 10 publications

(5 citation statements)

References 25 publications

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“…Because of the inflationary consequences associated with excessive expansion of money supply, Friedman (1963) asserted that monetary policy should be done by targeting the growth rate of the money supply to maintain economic and price stability. If the government finances a deficit budget either by printing of money by the contra bank or through the open market operations, both of the measures change the nominal money supply in an economy and therefore change the price level (Duodu et al, 2022).…”

Section: Introductionmentioning

confidence: 99%

“…Due to the diverse views among these school of thoughts, numerous scholars have conducted comprehensive examinations of the connection between inflation and its determinants in both developing and developed nations, yielding varied outcomes (Neupane, 1992;Khatiwada, 1994;Mathema,1998;Chaudhary and Xiumin, 2018;Kovanen, 2011;Adu & Marbuah, 2011;Nasir et al, 2020;Nguyen, 2015;Duodu et al, 2022;Byanjankar, 2020;Pandey, 2005;Poudyal, 2014;IMF, 2014;NRB, 2007).…”

Section: Introductionmentioning

confidence: 99%

“…However, these efforts have proven unsuccessful, as the inflation rate in the economy continues to fluctuate and remains near to double digits. The issue of inflation has consistently captured the attention of numerous researchers in the field of economics as it influences major decisions such as investment, consumption and savings among others (Duodu et al, 2022). Additionally, inflation can lead to the failure of important policies or projects because it disrupts budget allocation, ultimately hindering the economic progress.…”

Section: Introductionmentioning

confidence: 99%

“…This study has taken inflation as a dependent variable whereas broad money supply, budget deficit, Real GDP, Indian inflation and exchange rate are also considered as independent variables in the model. Based onDuodu et al (2022), the study has specified the following functional form:LnNCPI t = f (…”

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confidence: 99%

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An assessment of the Determinants of Inflation in Nepal: A study between 1974/75 and 2021/22

Chhetri

2023

Kalika J. Multidisc. Stud.

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Inflation is one of the important and interestingly touchy macroeconomic variables that influences other macroeconomic variables such as investment, consumption, saving and others. Therefore, it has become renewed interest in recent years mainly for both developed and developing countries. This paper examined the short-run and long-run relationship between inflation and its determinants in Nepal using time series data over the period of 1974/75-2021/22. The ARDL bound test approach to co-integration and error correction model have been used to examine the long-run and short-run relationship between variables. The results from ARDL bound test approach to co-integration show that broad money supply, Indian inflation and budget deficit have a significant positive effect on inflation while exchange rate negatively affect it in the long-run. The result from error correction model also found that Nepalese inflation and Indian inflation are significantly and positively related even in the short-run. However, real GDP affects inflation negatively as expected but it is statistically insignificant. A corollary of the results is that broad money supply, budget deficit, Indian inflation and exchange rate are the main drivers of inflation in Nepal.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

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An assessment of the Determinants of Inflation in Nepal: A study between 1974/75 and 2021/22

Chhetri

2023

Kalika J. Multidisc. Stud.

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“…In this context, monetarists argue that inflation will occur if the growth in money supply is more than the growth rate in output (Silaban et al, 2021). On the other hand, the structuralists associate the cause of inflation in underdeveloped and developing countries with the structural features of the economy (Duodu et al, 2022). According to the structuralists, excess money supply is a consequence of inflation rather than its cause, especially in underdeveloped economies (Atrkar Roshan, 2014), because structural problems such as underproduction in agricultural sector, insufficient exports, budget deficit and unemployment result in monetary expansion to ensure economic recovery (Fischer and Mayer, 1980).…”

Section: Introductionmentioning

confidence: 99%

What Drives Inflation in High-inflation Countries? Evidence from Haiti, Sudan, Türkiye and Zambia

Mucuk¹,

Evren²

2023

Politicka ekonomie

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The main purpose of this paper is to investigate the long-term effects of money supply, economic growth, interest rate, exchange rate, domestic credits and the oil price on inflation in Haiti, Sudan, Türkiye and Zambia, which are among the world's highest-inflation countries according to 2021 data. For this purpose, a panel cointegration approach is applied where fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) techniques are employed to explore the long-term effects with the help of annual data for the period 2000-2019. Also, the Dumitrescu and Hurlin panel causality test is used to determine whether there is a causality from these variables to inflation. The empirical findings show that there is a long-term relationship among these variables for the whole panel. The consequences from the FMOLS and DOLS estimates show that (i) money supply has a positive effect on inflation, (ii) economic growth affects inflation positively, (iii) an increase in the exchange rate causes inflation to rise, (iv) the oil price affects inflation positively, (v) interest rate affects inflation negatively, and (vi) domestic credits have a negative effect on inflation. In this context, we find that the exchange rate is the variable that has the greatest effect on inflation. Moreover, the findings of the panel causality test suggest that there is a causal relationship from money supply, economic growth, exchange rate and the oil price to inflation.

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RETRACTED ARTICLE: Inquiring asymmetric effects of oil prices, money supply, and domestic debt on consumer prices: an empirical evidence from Pakistan

Hassan,

Kalim

et al. 2023

Environ Sci Pollut Res

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Money supply, budget deficit and inflation dynamics in Ghana: An empirical investigation

Cited by 10 publications

References 25 publications

An assessment of the Determinants of Inflation in Nepal: A study between 1974/75 and 2021/22

An assessment of the Determinants of Inflation in Nepal: A study between 1974/75 and 2021/22

What Drives Inflation in High-inflation Countries? Evidence from Haiti, Sudan, Türkiye and Zambia

RETRACTED ARTICLE: Inquiring asymmetric effects of oil prices, money supply, and domestic debt on consumer prices: an empirical evidence from Pakistan

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