Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills

Volume: 6 Number: 4 September 1, 2016
  • Kwame Osei-assibey
EN

Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills

Abstract

Whilst democracy facilitates stabilization, political uncertainty around elections can be costly to economic growth, especially if investors believe it increases earning uncertainty and causes them to reduce their investments until after elections. The paper conjectures that new democracies (whose political environments are widely accepted to be characterized by political uncertainty problems) will even have investors demanding some compensation to buy assets which are generally considered risk-free. Data on the Ghanaian treasury bills (T-Bills) market empirically supports this: Rates increase around elections (compared to non-election period), suggest that political uncertainty is even priced in a risk-free asset such as T-Bills, thus creating electoral cycles. The paper proposes that new democracies should endeavor to strengthen financial institutions and frameworks that promote policy credibility to help mitigate the cost of political uncertainty.

Keywords

Details

Primary Language

English

Subjects

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Journal Section

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Authors

Kwame Osei-assibey This is me

Publication Date

September 1, 2016

Submission Date

September 1, 2016

Acceptance Date

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Published in Issue

Year 2016 Volume: 6 Number: 4

APA
Osei-assibey, K. (2016). Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills. International Journal of Economics and Financial Issues, 6(4), 1827-1834. https://izlik.org/JA99PZ84GB
AMA
1.Osei-assibey K. Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills. IJEFI. 2016;6(4):1827-1834. https://izlik.org/JA99PZ84GB
Chicago
Osei-assibey, Kwame. 2016. “Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills”. International Journal of Economics and Financial Issues 6 (4): 1827-34. https://izlik.org/JA99PZ84GB.
EndNote
Osei-assibey K (September 1, 2016) Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills. International Journal of Economics and Financial Issues 6 4 1827–1834.
IEEE
[1]K. Osei-assibey, “Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills”, IJEFI, vol. 6, no. 4, pp. 1827–1834, Sept. 2016, [Online]. Available: https://izlik.org/JA99PZ84GB
ISNAD
Osei-assibey, Kwame. “Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills”. International Journal of Economics and Financial Issues 6/4 (September 1, 2016): 1827-1834. https://izlik.org/JA99PZ84GB.
JAMA
1.Osei-assibey K. Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills. IJEFI. 2016;6:1827–1834.
MLA
Osei-assibey, Kwame. “Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills”. International Journal of Economics and Financial Issues, vol. 6, no. 4, Sept. 2016, pp. 1827-34, https://izlik.org/JA99PZ84GB.
Vancouver
1.Kwame Osei-assibey. Price of Political Uncertainty: Evidence from Ghanaian Treasury Bills. IJEFI [Internet]. 2016 Sep. 1;6(4):1827-34. Available from: https://izlik.org/JA99PZ84GB