The Relationship Between Inflation and Trade Openness: Evidence from Ghana
The correlation between economic growth, trade openness, and inflation has been extensively studied over the years, yielding varied outcomes. Recent disruptions caused by events such as the COVID-19 pandemic and the Russia-Ukraine war have significantly affected the global economy, resulting in a n...
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Corvinus University of Budapest
2024-12-01
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| Series: | Köz-gazdaság |
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| Online Access: | https://retp.eu/index.php/retp/article/view/1579 |
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| _version_ | 1841550945341669376 |
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| author | Evans Yeboah Alexander Amo Baffour |
| author_facet | Evans Yeboah Alexander Amo Baffour |
| author_sort | Evans Yeboah |
| collection | DOAJ |
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The correlation between economic growth, trade openness, and inflation has been extensively studied over the years, yielding varied outcomes. Recent disruptions caused by events such as the COVID-19 pandemic and the Russia-Ukraine war have significantly affected the global economy, resulting in a notable increase in inflation rates, particularly in developing countries. This study investigates the impacts of trade openness and inflation on the Ghanaian economy from 1990 to 2022. Employing the Autoregressive Distributed Lag (ARDL) bounds testing for cointegration and the Granger causality test for empirical analysis, the study reveals a mixed short-term effect, showing both positive and negative impacts of trade openness and inflation on economic growth in Ghana. While no long-term effect of trade openness is observed, inflation is found to have a negative long-term influence on growth. Additionally, the results of the Granger causality test suggest a unidirectional causal relationship between trade openness and economic development.
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| format | Article |
| id | doaj-art-c9eefa5f74864fdaa9fccc363782e21a |
| institution | Kabale University |
| issn | 1788-0696 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Corvinus University of Budapest |
| record_format | Article |
| series | Köz-gazdaság |
| spelling | doaj-art-c9eefa5f74864fdaa9fccc363782e21a2025-01-09T20:16:57ZengCorvinus University of BudapestKöz-gazdaság1788-06962024-12-0119410.14267/RETP2024.04.05The Relationship Between Inflation and Trade Openness: Evidence from GhanaEvans Yeboah0Alexander Amo Baffour1Master's student, Mendel University in BrnoDirector of College of Foundational and Professional Studies, Pentecost University The correlation between economic growth, trade openness, and inflation has been extensively studied over the years, yielding varied outcomes. Recent disruptions caused by events such as the COVID-19 pandemic and the Russia-Ukraine war have significantly affected the global economy, resulting in a notable increase in inflation rates, particularly in developing countries. This study investigates the impacts of trade openness and inflation on the Ghanaian economy from 1990 to 2022. Employing the Autoregressive Distributed Lag (ARDL) bounds testing for cointegration and the Granger causality test for empirical analysis, the study reveals a mixed short-term effect, showing both positive and negative impacts of trade openness and inflation on economic growth in Ghana. While no long-term effect of trade openness is observed, inflation is found to have a negative long-term influence on growth. Additionally, the results of the Granger causality test suggest a unidirectional causal relationship between trade openness and economic development. https://retp.eu/index.php/retp/article/view/1579GDP per capitainflationtrade opennesseconomic growthGranger causality testE30 |
| spellingShingle | Evans Yeboah Alexander Amo Baffour The Relationship Between Inflation and Trade Openness: Evidence from Ghana Köz-gazdaság GDP per capita inflation trade openness economic growth Granger causality test E30 |
| title | The Relationship Between Inflation and Trade Openness: Evidence from Ghana |
| title_full | The Relationship Between Inflation and Trade Openness: Evidence from Ghana |
| title_fullStr | The Relationship Between Inflation and Trade Openness: Evidence from Ghana |
| title_full_unstemmed | The Relationship Between Inflation and Trade Openness: Evidence from Ghana |
| title_short | The Relationship Between Inflation and Trade Openness: Evidence from Ghana |
| title_sort | relationship between inflation and trade openness evidence from ghana |
| topic | GDP per capita inflation trade openness economic growth Granger causality test E30 |
| url | https://retp.eu/index.php/retp/article/view/1579 |
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