Does Inflation Hamper Savings? An Empirical Assessment for Ghana

The paper examined the nature of the effect of inflation on savings in Open but Small economy of Ghana for 1970–2012 period using autoregressive distributed lag model (ARDL) and Ordinary Least Square models (OLS). The results show that there is significant negative effect of inflation on savings in the long run. The findings support the view that inflation hampers savings in the period under consideration. The findings support the inflation targeting policy of policy makers in the study area. Future studies should consider the examination of structural breaks and causal link between inflation and savings to allow for predictive conclusions.