Monetary Policy, Institutional Quality and Economic Growth: The Ghanaian Narrative

The multiplicate role of institutional quality in the monetary policy-economic growth nexus from the Ghanaian perspective has remained unexplored. This investigation explores two objectives. First, to analyse the effect of monetary policy on economic growth and second, to examine the multiplicative role of institutional quality in the monetary policy-economic growth nexus in Ghana. The study used secondary data collected from 1990-2021 and employed the bound testing to cointegration and ARDL technique. The result revealed a positive significant effect of monetary policy rate on economic growth in both the short and long run. However, money supply showed a statistically significant positive effect on economic growth in the long run yet a negative effect in the short run. Additionally, the rule of law and regulatory quality demonstrated a significant positive moderating role in the long run but a significant negative role in the short run in the monetary policy-economic growth nexus.