{
  "title": "Does Money Matter for Inflation in Ghana?",
  "publication": "IMF Working Papers, November 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/does-money-matter-for-inflation-in-ghana-25377",
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  "summary": "Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters).",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters).\n- Currency depreciation and demand pressures (as measured by the output gap) are important predictors of future price changes.\n- Inflation inertia is high and inflation expectations are largely based on backward-looking information.\n- Inflation expectations are not well anchored, suggesting more is needed to strengthen the credibility of Ghana's inflation-targeting regime."
    },
    {
      "heading": "Key findings and evidence",
      "content": "- Limited predictive power of monetary aggregates for inflation at horizons of four to eight quarters.\n- Strong predictive role for:\n  - Currency depreciation.\n  - Demand pressures as measured by the output gap.\n- High inflation inertia and backward-looking inflation expectations indicate weak anchoring of expectations."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Strengthen the credibility of Ghana's inflation-targeting regime to better anchor inflation expectations.\n- Given the predictive importance of currency depreciation and the output gap, monetary policy frameworks should:\n  - Monitor exchange rate developments closely.\n  - Pay attention to demand conditions captured by the output gap when forecasting inflation and setting policy.\n\n---\n\n Content in this bundle\n\n- Does Money Matter for Inflation in Ghana? — Section 1–3\n  - Does Money Matter for Inflation in Ghana? — Section 1–3 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Does Money Matter for Inflation in Ghana? — Section 1–3 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/does-money-matter-for-inflation-in-ghana-25377"
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    "[Markdown version](/en/publications/wp/issues/2016/12/31/does-money-matter-for-inflation-in-ghana-25377/index.md)",
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    "Authors: Arto Kovanen",
    "Published: November 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781463925291.001",
    "Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters).",
    "Currency depreciation and demand pressures (as measured by the output gap) are important predictors of future price changes.",
    "Inflation inertia is high and inflation expectations are largely based on backward-looking information.",
    "Inflation expectations are not well anchored, suggesting more is needed to strengthen the credibility of Ghana's inflation-targeting regime.",
    "Limited predictive power of monetary aggregates for inflation at horizons of four to eight quarters.",
    "Strong predictive role for:",
    "High inflation inertia and backward-looking inflation expectations indicate weak anchoring of expectations.",
    "Strengthen the credibility of Ghana's inflation-targeting regime to better anchor inflation expectations.",
    "Given the predictive importance of currency depreciation and the output gap, monetary policy frameworks should:",
    "**Does Money Matter for Inflation in Ghana? — Section 1–3**"
  ],
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