Ghana and the international cocoa market, 1956–1969 : A simulation model

This paper investigates the impact of the international cocoa market on Ghana between 1956 and 1969 by constructing and estimating an econometric model and simulating the effects of fluctuations in selected cocoa variables on her export revenue. In particular, it assesses repercussions of changes in the real incomes of major cocoa-consuming countries, of changes in the rest of the world's cocoa output, and of changes in the real price paid to Ghanaian cocoa farmers. Our results emphasize the vulnerability of Ghana to shocks emanating from the international economy, and the importance of dynamic lagged adjustment in the cocoa market.