What is the effect of inflation on consumer spending behaviour in Ghana?

Effah Nyamekye, Gabriel and Adusei Poku, Eugene (2017): What is the effect of inflation on consumer spending behaviour in Ghana?

Abstract

The paper examines the effect of inflation on consumer spending behaviour in Ghana during the period 1964 to 2013 using annual data. The analysis of the results was done using Ordinary least square test (OLS), the Johansen test (JH), and Vector Error Correction (VECM) test. The findings of the studies based on the JH tests showed stable significant long run relationship between inflation and consumer spending behaviour. The findings of the study shows significant short run relationship between inflation and consumer spending using the VECM. The results of the OLS test show there is positive relationship between inflation and consumer spending behaviour. Policy makers should take into account the findings of the study in managing the economy. Future studies on causality and structural break are worth undertaking.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inflation, consumer spending behaviour, long run, short run
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L67 - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L68 - Appliances ; Furniture ; Other Consumer Durables; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P24 - National Income, Product, and Expenditure ; Money ; Inflation; P - Economic Systems > P4 - Other Economic Systems > P44 - National Income, Product, and Expenditure ; Money ; Inflation; P - Economic Systems > P4 - Other Economic Systems > P46 - Consumer Economics ; Health ; Education and Training ; Welfare, Income, Wealth, and Poverty

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