%0 Journal Article
%T Savings-Growth Nexus in Ghana: Cointegration and Causal Relationship Analyses
%A Robert Becker Pickson
%A Koduah Dawud Enning
%A Anthony Siaw
%J Theoretical Economics Letters
%P 139-153
%@ 2162-2086
%D 2017
%I Scientific Research Publishing
%R 10.4236/tel.2017.72012
%X The wide range of controversies
surrounding the direction of causality</span><span style=\"font-family:&quot;\"><span style=\"font-family:Verdana;\"> between</span><span style=\"font-family:Verdana;\"> savings and economic growth necessitated this
study. The study was</span><span style=\"font-family:Verdana;\"> intended to investigate the relationship between
gross domestic savings and </span><span style=\"font-family:Verdana;\">economic growth in
Ghana; with </span></span><span style=\"font-family:Verdana;\">the </span><span style=\"font-family:Verdana;\">specific objective of finding whether</span><span style=\"font-family:Verdana;\"> there exists a long run relationship between them</span><span style=\"font-family:Verdana;\">,</span><span style=\"font-family:&quot;\"><span style=\"font-family:Verdana;\"> and it was also intended
to </span><span style=\"font-family:Verdana;\">ascertain the direction of causality
between the two running actors in the</span><span style=\"font-family:Verdana;\"> study over the period of 1972 to
2013. The study employed Johansen cointegration test to reveal no long run
relationship between gross domestic savings and economic growth in Ghana. This
necessitated the usage of the VAR technique to estimate the short run
relationships. The finding was that there exists </span><span style=\"font-family:Verdana;\">a unidirectional line of causation running f</span></span><span style=\"font-family:Verdana;\">ro</span><span style=\"font-family:Verdana;\">m gross domestic savings to</span><span style=\"font-family:Verdana;\"> <span style=\"font-family:Verdana;\">economic growth in Ghana.</span></span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">It is strongly recommended therefore that the</span><span style=\"font-family:Verdana;\"> Bank
of Ghana will use the monetary policy instruments to influence and advi</span><span style=\"font-family:Verdana;\">s</span><span style=\"font-family:Verdana;\">e the commercial banks on
the need to p</span><span style=\"font-family:Verdana;\">e</span><span style=\"font-family:Verdana;\">g the
deposit rate relatively higher at least equal or little above the existing
interest rate.</span><span style=\"font-family:Verdana;\"> This is because the
deposit rate is the opportunity cost of money demand for other purposes.
%K Gross Domestic Savings
%K Economic Growth
%K Ghana
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=73909