Impact of Monetary Policy on Gross Domestic Product (GDP)

Interdisciplinary Journal of Contemporary Research in Business, 3(1), 1348 - 1361.

18 Pages Posted: 3 Jun 2011 Last revised: 4 Jun 2012

Date Written: 2010

Abstract

This research article focuses on the impact of Monetary Policy on GDP. GDP no doubt is affected by the Monetary Policy of the state. The research papers of various authors have been studied in this regard to prove the Hypothesis and after in depth analysis by applying Regression Analysis technique it has been observed that the relationship between the two exists. The data of past 30 years of Pakistan has been used for driving the conclusion. The study proved that the interest rate has minor relationship with GDP but the Growth in Money Supply greatly affects the GDP of an economy, obviously various unknown factors also affects the GDP. Growth in Money Supply has a huge impact on GDP. The Research study can further be used for developmental projects for the Growth of Economy, Quality improvements, Household production, the underground economy, Health and life expectancy, the environment, Political immunity and ethnic justice.

Keywords: Monetary Policy, Gross Domestic Product, Inflation, Money Supply

JEL Classification: E52, E63

Suggested Citation

Hameed, Irfan, Impact of Monetary Policy on Gross Domestic Product (GDP) (2010). Interdisciplinary Journal of Contemporary Research in Business, 3(1), 1348 - 1361.. Available at SSRN: https://ssrn.com/abstract=1857413 or http://dx.doi.org/10.2139/ssrn.1857413

Irfan Hameed (Contact Author)

Iqra University ( email )

Defence View, Phase-2
Karachi, Sindh
Pakistan

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