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2012 (Vol. 4, Issue: 2)
Article Information:

Modeling the Pattern of Reserve Money Growth in Ghana

Nasiru Suleman and Solomon Sarpong
Corresponding Author:  NASIRU SULEMAN 

Key words:  Forecast, Ghana, reserve money, SARIMA, , ,
Vol. 4 , (2): 39-42
Submitted Accepted Published
January 21, 2011 February 17, 2011 April 30, 2012

The role played by reserve money growth cannot be ignored in the development of a country. Thus, this study describes an empirical approach to modeling monthly reserve money growth in Ghana using SARIMA model. The result showed that ARIMA (0, 1, 1)(0, 0, 1)12 model was appropriate for modeling the reserve money growth. This model has the least AIC of 608.91, AICc of 609.18, BIC of 616.44, RMSE of 6.33, MAPE of 16.90 and MAE of 4.39, respectively. Diagnostic test of the model residuals with the ARCH LM-test and Durbin-Watson test indicates that there is no ARCH effect and autocorrelation in the residuals respectively. Finally, a twenty eight months forecast with the model showed that from the middle of the year 2011 to December, 2012, there will be an increase in the reserve money growth. Hence, we recommend that the government and other policy holders should devise appropriate measures to slow the growth since the country is not experiencing low inflation.
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  Cite this Reference:
Nasiru Suleman and Solomon Sarpong, 2012. Modeling the Pattern of Reserve Money Growth in Ghana.  Current Research Journal of Economic Theory, 4(2): 39-42.
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ISSN (Online):  2042-485X
ISSN (Print):   2042-4841
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