The Impact of Changes in Monetary Policy Rates on the Lending and Financial Performance of Banks in Ghana
November 30, 2016
Government Expenditure Pertaining to Economic Growth
November 30, 2016

Capital Market Development and Economic Growth’s Pertinent Classification


The study re-examines the short run and long run relationship between stock market development and economic growth in Ghana. The study employed secondary quarterly data spanning 1991-2014. To empirically test the relationship between the two variables, first, the study employed the Unit root test, Johansen’s cointegration test and the Granger causality test. The Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) were also used to capture both the short-run and long-run dynamics. The results reveal that there is cointegration between the two variables and the existence of a weak long run causality flow from economic growth and stock market development. Conclusively, the extent to which Ghana stock market development affects economic growth is negative and statistically weak.