IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v4y2020i6p225-229.html

Effect of Money Supply on Economic Growth in Rwanda

Author

Listed:
  • Tharcille INGABIRE

    (Department of Economics, School of Business and Economics, Kigali Independent University)

  • Josiane UWINEZA

    (Department of Economics, School of Business and Economics, Kigali Independent University)

  • Marie Laetitia Benimana

    (Department of Data Science, African Institute for Mathematical Sciences)

  • Fabrice Musafiri

    (Department of Mining Engineering, University of Rwanda, College of Science and Technology)

  • Gloria Berimana

    (Department of Computer Engineering, University of Rwanda, College of Science and Technology)

  • Nancy Clemence Ishimwe

    (Mathematics Physics and Geography Combination, Groupe Scolaire de Shyogwe)

  • Noel Nshizirungu

    (Department of Economics, College of Natural Sciences, Daegu University, Korea)

Abstract

The effect of money supply in enhancing economic growth in Rwanda is investigated in this study. This study aims at assessing the Effect of money supply on economic growth in Rwanda through economic growth (GDP) per capita in Rwanda. The study uses Rwanda National Bank and World Bank data from 2008 to 2018. This study used the autoregressive distributed lag (ARDL)-bounds testing to co-integration and Ordinary Least Squares regression technique for analysis of the data to assess the impact of money supply on GDP per capita in Rwanda. The study model is composed of five macroeconomics variables which are Gross Domestic Product per capita, Money supply, Lending Interest Rate, Gross Capital Formation and deposit rate. The study findings Shows a statistical significant positive association between money supply and economic growth in Rwanda both in short run and long run. This study suggests that money supply should be increase at a steady rate by keeping pace with the growth of Rwandan economy.

Suggested Citation

  • Tharcille INGABIRE & Josiane UWINEZA & Marie Laetitia Benimana & Fabrice Musafiri & Gloria Berimana & Nancy Clemence Ishimwe & Noel Nshizirungu, 2020. "Effect of Money Supply on Economic Growth in Rwanda," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(6), pages 225-229, June.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:6:p:225-229
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-4-issue-6/225-229.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/virtual-library/papers/effect-of-money-supply-on-economic-growth-in-rwanda/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Weiss, Laurence M, 1980. "The Effects of Money Supply on Economic Welfare in the Steady State," Econometrica, Econometric Society, vol. 48(3), pages 565-576, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kunle Bankole Osinusi & Nurudeen Abiodun Lawal & Sodiq Olaide Bisiriyu, 2022. "Trade Balance, Exchange Rate and Money Supply in Nigeria: Growth Implications and Lesson for African Countries," Management & Economics Research Journal, Faculty of Economics, Commercial and Management Sciences, Ziane Achour University of Djelfa, vol. 4(2), pages 25-44, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xavier Ragot, 2005. "A theory of low inflation in a non Ricardian economy with credit constraints," PSE Working Papers halshs-00590788, HAL.
    2. repec:spo:wpecon:info:hdl:2441/8805 is not listed on IDEAS
    3. Firouz Gahvari & Luca Micheletto, 2019. "Heterogeneity, monetary policy, Mirrleesian taxes, and the Friedman rule," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(4), pages 983-1018, June.
    4. Stefan Homburg, 2015. "Superneutrality of Money under Open Market Operations," CESifo Working Paper Series 5219, CESifo.
    5. Lukas Altermatt & Christian Wipf, 2024. "Liquidity, the Mundell–Tobin Effect, and the Friedman Rule," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(5), pages 1235-1259, August.
    6. Gahvari, Firouz & Micheletto, Luca, 2012. "Monetary policy and redistribution: What can or cannot be neutralized with Mirrleesian taxes," Working Paper Series, Center for Fiscal Studies 2012:5, Uppsala University, Department of Economics.
    7. Stéphane Guibaud & Yves Nosbusch & Dimitri Vayanos, 2013. "Bond Market Clienteles, the Yield Curve, and the Optimal Maturity Structure of Government Debt," The Review of Financial Studies, Society for Financial Studies, vol. 26(8), pages 1914-1961.
    8. Joe Haslag & Joydeep Bhattacharya & Steven Russell, 2003. "Understanding the Roles of Money, or When is the Friedman Rule Optimal, and Why?," Working Papers 0301, Department of Economics, University of Missouri.
    9. Christophe Chamley, 1981. "On the Infinite Welfare Cost of Inflation and Other Second Order Effects," Cowles Foundation Discussion Papers 598, Cowles Foundation for Research in Economics, Yale University.
    10. Fabrizio Orrego & Stephen Spear, "undated". "Sequential incompleteness and dynamic suboptimality in stochastic OLG economies with production," GSIA Working Papers 2012-E38, Carnegie Mellon University, Tepper School of Business.
    11. Sonali Das & Rangan Gupta & Patrick Kanda & Monique Reid & Christian Tipoy & Mulatu Zerihun, 2014. "Real interest rate persistence in South Africa: evidence and implications," Economic Change and Restructuring, Springer, vol. 47(1), pages 41-62, February.
    12. Yann Algan & Xavier Ragot, 2005. "Monetary policy with heterogenous agents and credit constraints," PSE Working Papers halshs-00590565, HAL.
    13. Gahvari, Firouz, 2007. "The Friedman rule: Old and new," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 581-589, March.
    14. Peter N. Ireland, 2005. "The Liquidity Trap, The Real Balance Effect, And The Friedman Rule ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(4), pages 1271-1301, November.
    15. Rapach, David E., 2002. "The long-run relationship between inflation and real stock prices," Journal of Macroeconomics, Elsevier, vol. 24(3), pages 331-351, September.
    16. Ferreira, Pedro Cavalcanti, 1998. "Inflationary financing of public investment and economic growth," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 322, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    17. Christopher J. Neely & David E. Rapach, 2008. "Real interest rate persistence: evidence and implications," Review, Federal Reserve Bank of St. Louis, vol. 90(Nov), pages 609-642.
    18. repec:spo:wpmain:info:hdl:2441/8805 is not listed on IDEAS
    19. Ferreira, Pedro Cavalcanti, 2001. "Inflation, welfare and public expenditures," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 431, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    20. Lise Clain-Chamosset-Yvrard & Nicolas Clootens & Daria Onori, 2025. "Optimal Green Policy-mix," Working Papers 2507, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    21. Трофимов Г.Ю., 2014. "Инфляция Активов И Кредитная Экспансия В Экономике С Перекрывающимися Поколениями," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 50(4), pages 89-103, октябрь.
    22. Carl E. Walsh, 1984. "Optimal Taxation by the Monetary Authority," NBER Working Papers 1375, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:4:y:2020:i:6:p:225-229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.