FINANCIAL MARKET INSTRUMENTS AND ECONOMIC GROWTH IN GHANA

Abstract

This study interrogates the relationship between financial market instruments and economic growth for Ghana, relying on time series economic dataset spanning from 1980 to 2020, and using economic and financial data gleaned from World development indicators of the World Bank and from the Central Bank of Ghana. Econometrically, Augmented Dicky-Fuller (ADF), Johansen cointegration test and error correction model (ECM) was used for the analysis. Study findings show that, there is statistically significant association between financial market instrument and economic growth in Ghana. Further, the relationship between financial market instruments and growth of Ghana’s financial sector is insignificant. We recommend amongst others, the necessity for state actors to create enabling environment for macroeconomic fundamentals to strive, conso-lidate gains and continue reforms geared towards deepening the financial space to enhance domestic economic activities, investment, and long-term economic health of the nation.