The Relationship Between Policy Rates and Domestic Debt in Ghana (Published)
The principal purpose of this study is to investigate the relationship between policy rates and domestic debt in Ghana. Utilizing a time series data, the study adopted the Vector Error Correction Model (VECM) for result analysis. Over the long run, domestic debt was found to have a negative impact on monetary policy rate, with the reverse observed for the short run. However, both models yielded statistically insignificant results. Nevertheless, the study revealed a statistically significant relationship between inflation and real GDP with the monetary policy rate in the long run, indicating a positive and negative impact, respectively. In the short run, only inflation was found to be statistically significant. The study’s findings and analysis were found to be reliable as there was no evidence of serial correlation or heteroskedasticity in the model. In the end, the study was able to address a crucial gap in the literature on public debt by primarily investigating the influence of domestic debt on monetary policy rate in Ghana.
Keywords: Domestic debt, Monetary Policy Rate., vector error correction model
Interest Rate Dynamics and Its Impact on the Performance of the Manufacturing Sub-Sector in Nigeria (Published)
The major focus of the research is to empirically investigate the impact of interest rate dynamics on performance of manufacturing- sub sector in Nigeria. The research covers the period between 1980 and 2019. This period is important since it includes the pre-structural adjustment programme (SAP) era where interest rate was not liberalized and the structural adjustment programme period where interest rate is liberalized. The cointegration technique with its implied error correction mechanism was used for the study. The result shows that the high interest rate in Nigeria has hindered the performance of the manufacturing sub sector. The GARCH and ARCH results indicates that interest rate dynamics has influenced the performance of the manufacturing sub- sector. The result also confirms a long run relationship among the variables. It was therefore recommended amongst others, that there should be a drastic reduction in the interest rate coupled with the adoption of liberalized interest rate regime with some caution; this will increase the performance of the manufacturing sub- sector in Nigeria.
Keywords: Minimum rediscount rate, Monetary Policy Rate., Treasury Bills, and inflationary spiral., manufacturing sub-sector