Document Type

Thesis - Open Access

Award Date


Degree Name

Master of Science (MS)

Department / School


First Advisor

Hailong Jin


Cost of Credit, Exchange rate, Fluctuation, Ghana, Inflation targeting framework, Vector error correction model


Fluctuations in exchange rate and cost of credit affect most economies in the world. The problem arises with the uncertainty it generates and the challenges it poses to the economy. The volatility of the exchange rate has been studied extensively in the extant literature, but the problem continues to persist. This paper therefore investigates whether inflation targeting framework influences the exchange rate and cost of credit in Ghana using data from February 2001 to March 2019. Using vector autoregressive model and vector error correction model, the study reveals that the exchange rate situation improves in both the short and long run after the imposition of the inflation targeting framework. Also, in the short run, the cost of credit reduces after the policy, but it is insignificant in the long run.

Library of Congress Subject Headings

Foreign exchange rates -- Ghana.
Credit -- Ghana.
Inflation targeting -- Ghana.



Number of Pages



South Dakota State University

Included in

Economics Commons



Rights Statement

In Copyright