THE IMPACT OF MONETARY AND FISCAL POLICIES ON INFLATION AND ECONOMIC GROWTH OF SELECTED DEVELOPING COUNTRIES: AN EMPIRICAL APPROACH

Authors

  • Shah Dost MSEF Research Scholar, Mohammad Ali Jinnah University, Karachi, Pakistan
  • Dr. Muhammad Meraj Faculty of Social and Basic Sciences, Mohammad Ali Jinnah University, Karachi
  • Meer Jan Department of Economics, University of Turbat, Balochistan, Pakistan

Keywords:

Monetary, Fiscal, Inflation,, Economic growth, Developing Countries

Abstract

This study investigates the effects of monetary and fiscal policies on economic growth and inflation in selected developing countries, using data from 2001 to 2020. The research employs an ARDL approach to analyze the impact of money supply and taxation systems on these economic variables. The findings reveal a stronger influence of fiscal policy on economic growth in both the long and short run compared to monetary policy. A specific case is highlighted: in 2019, Pakistan experienced a collapse in its real economy while nominal figures rose. To ensure robustness, panel dynamic OLS was utilized, and results were obtained from PMG estimation. The study recommends that policymakers prioritize fiscal policy to enhance GDP growth, while monetary policy should be aimed at achieving price stability.

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Published

2024-09-30

Issue

Vol. 4 No. 3 (2024): GISRAS Journal of Management & Islamic Finance (GJMIF)

Section

Articles