Remittances and Economic Growth: Empirical Evidence from Ghana

Abstract

This study investigated the link between remittances and economic growth in Ghana. The inflow of remittances into Ghana specifically and into Sub-Saharan Africa in general is very insignificant compared to other parts of the developing world. The study used the Granger-causality and Cointegration tests under the Vector Autoregression (VAR) framework. The results showed a unidirectional link between remittances and economic growth in Ghana. They showed that remittances lead to economic growth marginally but economic growth does not lead to remittances. They also established that remittances have been very useful in promoting household welfare and health.

Keywords: Remittances, Economic Growth, Cointegration, Granger-causality