Abstract:
This paper analyzes the long-run equilibrium relationship between retail and wholesale Ghanaian
maize prices with cointegration test assuming asymmetric adjustment. Using the Enders-Siklos asymmetric cointegration tests, it is found that the retail and wholesale prices are cointegrated with threshold adjustment. Furthermore, the adjustment process is asymmetric when the retail and wholesale
prices adjust to achieve the long-term equilibrium. Finally, there is faster convergence for negative
deviations from long-term equilibrium than for positive deviations. These results imply that price increases tend to persist whereas decreases tend to revert quickly towards equilibrium
