INFLATION AND UNEMPLOYMENT DYNAMICS IN GHANA

Abstract

This study analyzes the relationship between inflation and unemployment in the Ghanaian economy, which is characterized by abundant natural resources but hindered by low per capita income, high unemployment, and escalating inflation. The study employs the ARDL model to conduct a meticulous econometric analysis, revealing macroeconomic indicators' intricate impacts on economic growth and social welfare. The study reveals a consistent gap between government policies and economic difficulties, indicating an immediate requirement to adjust policy creation and execution. This study examines the societal implications of current economic conditions, specifically the potential for societal unrest and the erosion of families' purchasing power. Effective remedial action is imperative. The CUSUM and Sensitivity tests were employed to enhance our research, confirming the strength and dependability of our model and results. Based on our findings, we suggest practical policy measures to address these economic obstacles. The research aims to contribute to the critical discourse on Ghana's economic development, with a focus on achieving economic robustness and social equity in the future. This paper provides valuable insights for policymakers, economists, and researchers seeking to comprehend the intricacies of inflation and unemployment in developing economies, specifically those in contexts similar to Ghana.