Department of Statistics
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Browsing Department of Statistics by Author "Aidoo, E.K."
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Item Analysis of Exchange Rates as Time-Inhomogeneous Markov Chain with Finite States(Journal of Applied Mathematics, 2022) Mettle, F.O.; Boateng, L.P.; Quaye, E.N.B.; Aidoo, E.K.; Seidu, I.Irrespective of whether the test for homogeneity is significant or not, most researchers assume time-homogeneity in analysing Markov chains due to scanty literature on the analysis of time-inhomogeneous Markov chains. Based on the assumption that, for each point in time in the future, a stochastic process will be subjected to a randomly selected transition matrix from an ergodic set of transition matrices the process was subjected to in the recent past, a methodology was proposed for analysing the long-run behaviours of time-inhomogeneous Markov chains. The proposed model was implemented to historical data consisting of the exchange rate of cedi-dollar, cedi-pound, and cedi-euro spanning over 6 years (January 2012 to December 2017). The results show that under certain “closeness” conditions, the long-run behaviours of the time-inhomogeneous case are almost identical to those of the time-homogeneous case. The paper asserted that even if the Markov chain exhibit time-inhomogeneity, analysing the Markov chain under the assumption of time-homogeneity is a step in the right direction under certain “closeness” conditions; otherwise, the proposed method is recommended. It was also found that investing in dollars yields better returns than the other currencies in Ghana.Item Analysis of Investment Returns as Markov Chain Random Walk(International Journal of Mathematics and Mathematical Sciences, 2024) Mettle, F.O.; Agyekum, L.; Aidoo, E.K.; Dowuona, C.O.N.The main objective of this paper is to analyse investment returns using a stochastic model and inform investors about the best stock market to invest in. To this effect, a Markov chain random walk model was successfully developed and implemented on 450 monthly market returns data spanning from January 1976 to December 2020 for Canada, India, Mexico, South Africa, and Switzerland obtained from the Federal Reserves of the Bank of St. Louis. Limiting state probabilities and six-month moving crush probabilities were estimated for each country, and these were used to assess the performance of the markets. Te Mexican market was observed to have the lowest probabilities for all the negative states, while the Indian market recorded the largest limiting probabilities. In the case of positive states, the Mexican market recorded the highest limiting probabilities, while the Indian market recorded the lowest limiting probabilities. The results showed that the Mexican market performed better than the others over the study period, whilst India performed poorly. These findings provide crucial information for market regulators and investors in setting regulations and decision-making in investment.Item Government Stability in the Remittance-Economic Growth Link in Ghana(International Journal of Applied Economics, Finance and Accounting, 2022) Adu-Darko, E.; Aidoo, E.K.Several studies have revealed that many factors affect economic growth. Remittances and government stability have been identified as two of these factors. Over the years, remittances have become a major source of financial inflows, especially in Ghana. This study examines the role of government stability in the remittance-economic growth relationship in Ghana. Annual time series data from 1984 to 2020 was extracted from the World Development Indicators (WDI) and the International Country Risk Guide (ICRG). An ARDL model with a level structural break was estimated. The results show, first, that a cointegration relationship exists among the variables in the presence of structural breaks. Secondly, remittances and government stability have a significant, positive long-run impact on economic growth, while there is no significant impact of GDPPC and government stability on remittances was found. Thirdly, in the short run, remittances and government stability are not significantly associated with growth. The role of remittances in the economic growth of Ghana important. When remittances increase, economic growth will likewise increase. Government policy-making should create an enabling environment to channel remittances into productive uses, including entrepreneurial ventures. Remittances must be received through proper channels for easy accountability, and government stability should be complemented by good governance to further foster economic growth.