ABSTRACT
The preceding chapter discussed the nature of domestic macroeconomic policies and their effects on the external sector of the Ghanaian economy for the period from 1960 to 2000. The recurring pattern that emerged was that anytime there was a change in the trade regime and macroeconomic stance, the performance of the external economy was affected very significantly. This chapter reports the econometric analysis of Ghana’s current account based on the present value model of the current account (PVMCA). The theoretical and econometric basis of this analysis was laid out in earlier chapters and has already been applied to the Nigerian economy. This chapter tests the basic model and the various extensions of the PVMCA specified in Chapter 4.
