EXAMINATION OF MONETARY VARIABLES ON THE GHANAIAN ECONOMY (1990 – 2013)

This study analyzed the behaviour of the Ghanaian economy since 1990s. The focus was on some selected monetary variables (Interest rate, inflation and exchange rate). The simple statistical tools employed were line graphs, correlation and the Ordinary Least Squares estimation technique. In line with the background information the study revealed that inflation and interest rate fluctuates since 1990s with the exception of exchange rate which gained a positively sloped over the years (1990 – 2013). In terms of association between the variables, the study further revealed a weak negative association between inflation and economic growth. There was also a fair association between interest and economic growth and lastly, there was a strong positive relationship between exchange rate and economic growth. In terms of marginal effects, exchange as well as inflation was found out to significantly affect the performance of the Ghanaian economy at 1% and 10% level of significance respectively. Therefore, there should be exchange rate stabilization policy to achieve economic growth in Ghana.