Real Exchange Rate and Economic Growth in Ghana

The study sought to determine the effect of real effective exchange rate on economic growth in Ghana using annual data from 1984 to 2014. Data was sourced from the databases of the World Bank, the Bank of Ghana annual bulletins, and the Ghana Ministry of Finance and Economic Planning. Using the ARDL cointegration estimation technique, the study found that real exchange rate and economic growth are cointegrated. The result suggests that the real exchange rate exerts a positive and statistically significant effect on economic growth in both the long-run and short-run. Thus, there is the need to ensure exchange rate stability in the Ghanaian economy to help boost economic growth