Skip to content
Research Article Open access CC BY 4.0

Understanding Global Commodity Price Shocks on Exchange Rates and Inflation in Emerging Economies: ARDL Perspective

Seth Acquah Boateng, Frank Agyemang Karikari, Michael Provide Fumey, Emmanuel Ekow Asmah, Stephen Antwi Winful

Journal of Economics, Management and Trade · pp. 33–47 · Published 13 Apr 2024

10.9734/jemt/2024/v30i51208

Abstract

Aims: To analyze the changing relationship between commodity prices (cocoa, diesel, gold, oil, petrol) and macroeconomic factors (exchange rate and inflation) in Ghana and differentiate between long-term and short-term effects. Study Design: Quantitative Design with Time series analysis using the Autoregressive Distributed Lag (ARDL) technique. Methodology: The study utilized cointegration and Error Correction Model in econometric estimation. Time series data for commodity prices and macroeconomic factors were collected for the period 2003M01 to 2023M10. The ARDL technique was applied to differentiate between long-term and short-term effects of inflation and exchange rates. Results: The short-run and long-run results indicate a positive relationship between commodity prices and inflation and exchange rates. A 1% increase in diesel prices is associated with a 0.23% appreciation in Ghana's currency in the short run (p=0.019) and a 1.76% rise in inflation in the long run (p=0.012). Past inflation has a dominant influence on current inflation, with a 1 percentage point increase in the previous year's inflation leading to a 0.45 percentage point increase in the current inflation rate. Conclusion:  Policymakers should prioritize stabilizing diesel prices, invest in storage facilities, promote alternative energy sources, strengthen domestic production and distribution of essential commodities, and adopt targeted monetary and fiscal policies to anchor inflationary expectations and address inflation inertia in Ghana.

Commodity prices inflation exchange rate inflation inertia autoregressive distributed lag (ARDL)

References (43)

  1. 1 Bounds testing approaches to the analysis of level relationships [DOI]
  2. 2 Testing for Granger non-causality in heterogeneous panels [DOI]
  3. 3 Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors [DOI]
  4. 4 Revisiting the oil price and stock market nexus: A nonlinear Panel ARDL approach [DOI]
  5. 5 A Multiple and Partial Wavelet Analysis of the Oil Price, Inflation, Exchange Rate, and Economic Growth Nexus in Saudi Arabia [DOI]
  6. 6 Unprecedented but not Unpredictable: Effects of the COVID-19 Crisis on Commodity-Dependent Countries [DOI]
  7. 7 The impact of commodity price shocks in a copper-rich economy: the case of Chile [DOI]
  8. 8 Commodity prices and inflation risk [DOI]
  9. 9 Evaluating the exchange rate and commodity price nexus in Malaysia: evidence from the threshold cointegration approach [DOI]
  10. 10 OIL PRICE SHOCKS, INFLATION, AND CHINESE MONETARY POLICY [DOI]
  11. 11 ASYMMETRIC DEPENDENCE BETWEEN EXCHANGE RATE AND COMMODITY PRICES IN GHANA [DOI]
  12. 12 Exploring the Trend of Commodity Prices: A Review and Bibliometric Analysis [DOI]
  13. 13 Commodity prices, inflation and inflation uncertainty among emerging economies [DOI]
  14. 14 COMMODITY PRICE AND INFLATION DYNAMICS: EVIDENCE FROM BRIICS [DOI]
  15. 15 Commodity prices and exchange rates: evidence from commodity-dependent developed and emerging economies [DOI]
  16. 16 Commodities and monetary policy: Implications for inflation and price level targeting [DOI]
  17. 17 The asymmetry effect of oil price changes on inflation, and the welfare implication for Ghana [DOI]
  18. 18 Co-jumps in the U.S. interest rates and precious metals markets and their implications for investors [DOI]
  19. 19 Impact of Oil and Agricultural Shocks on the Financial Markets of Emerging Market Economies [DOI]
  20. 20 Foreign Exchange and Global Monetary Shocks: The Asymmetric Effects of Advanced Economies’ Quantitative Easing on Exchange Rate Volatility in Emerging Markets [DOI]
  21. 21 Terms of Trade Shocks and Inflation Targeting in Emerging Market Economies [DOI]
  22. 22 The Commodity Price and Exchange Rate Dynamics [DOI]
  23. 23 Commodity price fluctuations and development: perspective from emerging economies [DOI]
  24. 24 PALM OIL PRICE–EXCHANGE RATE NEXUS IN INDONESIA AND MALAYSIA [DOI]
  25. 25 The Relationship between the Gold Price, Crude Oil Price, Exchange Rate and Chinese Stock Market Indexes [DOI]
  26. 26 An Assymetric Evaluation of Oil Price- Inflation Nexus: Evidence from Nigeria [DOI]
  27. 27 Oil-exchange rate volatilities and returns nexus [DOI]
  28. 28 Commodity prices and the Brazilian real exchange rate [DOI]
  29. 29 Commodity Terms of Trade [DOI]
  30. 30 A case for leaning against the wind in a commodity-exporting economy [DOI]
  31. 31 Commodity prices and inflation: an application of structural VAR [DOI]
  32. 32 The Link Between Higher Commodity Prices and Inflation [DOI]
  33. 33 Causes and Consequences of Industrial Commodity Price Shocks [DOI]
  34. 34 The impact of globalization on the dynamics of inflation [DOI]
  35. 35 Commodity Prices, Monetary Policy and the Taylor Rule [DOI]
  36. 36 A Study on the Dynamic Behaviour of Headline Versus Core Inflation: Evidence from India [DOI]
  37. 37 Global Shocks and Emerging Economies: Disentangling the Commodity Roller [DOI]
  38. 38 Corporate Governance and Organizational Behavior Review [DOI]
  39. 39 Asian Journal of Economic Modelling [DOI]
  40. 40 Global Food Prices and Inflation [DOI]
  41. 41 Commodity Terms of Trade Volatility and Industry Growth [DOI]
  42. 42 The Consumption Terms of Trade and Commodity Prices [DOI]
  43. 43 Research Insights: Do Primary Commodity Prices Account for the Fluctuations of Exchange Rates? [DOI]

Cited by 8

AI-Enhanced Inflation Forecasting in Emerging Economies

T. Adukpo, Jacob Bethel Obeng, Linda Fynn Prah · American Journal of Applied Statistics and Economics · 2026

Agricultural Productivity‐Driven Renewable Energy Adoption and Mechanisms in Developing Economies: A Double Machine Learning Approach

Jian-Cheng Xi, Seth Acquah Boateng, K. Agyei · Sustainable Development · 2025

An Integrated LSTM-TabNet Ensemble with Elastic Net for Jakarta Composite Index Forecasting

Muhammad Rangga Miftahul Falah, Gatot Soepriyono, Endah Tri Esti Handayani · 2025 1st International Conference on Emerging Trends in Information Systems and Informatics (ICETISI) · 2025

Asymmetric Dependence between Commodity Prices and Selected Macroeconomic Variables in Ghana

S. Yeboah, M. Fumey, Stephen Antwi Winful · Scientific African · 2025

Determinants of enterprise green innovation performance: Examining the role of environmental orientation, green practices, and organizational commitment

M. Fumey, Frank Agyemang Karikari, Seth Acquah Boateng · Sustainable Economies · 2025

Effect of exchange rate volatility on cocoa export in Côte d’Ivoire

DOGO ARMAND · 2025

Showing 6 of 8 known citations — external sources report more than can currently be individually listed.

Related research

Article metrics

Real usage data collected on this platform.

12

Page views

0

PDF downloads

1

Outbound clicks

8

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.