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Macroeconomic Determinants of Economic Growth under the Perspective of Monetary Policy in Pakistan: An Empirical Analysis


  • Muhammad Zahid Naeem

    (University of the Punjab, Lahore, Pakistan)

  • Chan Bibi

    (International Islamic University, Islamabad, Pakistan)


This article examines the determinants economic growth under the perspective of monetary policy in the case of Pakistan over the period of 1980 to 2018. Economic growth has been used as dependent variable, whereas exchange rate, consumer price index, unemployment rate and money supply have been used as independent variables. For empirical analysis data from 1980 to 2018 has been used. For checking the stationarity of the variables augmented Dickey-Fuller unit root test has been used. This study has used ARDL test for examining the cointegration among the variable of the model. The estimated results of the study show that the exchange rate has a positive and significant impact on economic growth in the case of Pakistan. Inflation has a positive, but insignificant impact on economic growth in the case of Pakistan over the selected time period. Unemployment rate negative and significant impact on economic growth in the case of Pakistan. The estimates show that monetary policy has a positive and significant impact on economic growth in the case of Pakistan. This study suggests that for raising the level of economic growth in the case of Pakistan, a soft monetary policy is needed to lower level of unemployment.

Suggested Citation

  • Muhammad Zahid Naeem & Chan Bibi, 2019. "Macroeconomic Determinants of Economic Growth under the Perspective of Monetary Policy in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(3), pages 164-176, September.
  • Handle: RePEc:rfh:bbejor:v:8:y:2019:i:3:p:164-176

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    References listed on IDEAS

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    More about this item


    economic growth; money supply;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers


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