INTERNATIONAL COMMODITY PRICE SHOCK AND ECONOMIC GROWTH IN GHANA

ABSTRACT The purpose of this study was to examine the effects of international commodity price shocks on economic growth in Ghana from 1990 to 2016. Time series data were collected on oil price, gold price, cocoa price, capital, labour, inflation, exchange rate and trade openness from the Central Bank of Ghana and the World Development Indicators. The study employed Autoregressive Distributed Lag (ARDL) to examine the relationship between the index of commodity price shock on economic growth in Ghana. The study found that there was a positive significant long-run and short-run relationship between the index of commodity price shock and economic growth in Ghana. The study recommends the need for value addition to the commodities that Ghana exports in its raw state by the constructions of manufacturing companies to transform the raw materials into semi-finished and finished goods.