A tale of two Cedis: Making sense of a new currency in Ghana

Ghana (West Africa) underwent a currency change in July 2007. This paper explores the adaptation to the New Ghana Cedi one year post-redenomination using the theoretical framework of the Money Illusion Effect and the relearning-rescaling hypotheses. Study 1 revealed that the old and new currencies appeared to be valued similarly, based on the ratings of gains and losses in the old and new currencies. This result is consistent with the slogan of the Ghanaian redenomination public education campaign and suggests that people can be inoculated against the Money Illusion Effect through education. In study 2, attributes of the new currency were rated more positively than those of the old currency, suggesting a preference for the New Ghana Cedi.