Degree of price rigidity in LICs and implication for monetary policy

Using semi-aggregate data on price and a methodology based on dummy indicator, we assess price rigidity in Ghana and discuss its implications for monetary policy. Price features in Ghana are compared to that of South Africa which is a similar country both in terms of economic structure and monetary policy framework. Our results suggest higher price rigidity in South Africa than in Ghana. Therefore, the same monetary policy is likely to have ceteris paribus, more real effects in South Africa and more nominal effects in Ghana.