Monetary Policy and Economic Growth: A Review of International Literature

Artikel

This paper aims to survey the existing literature, both theoretical and empirical, on the relationship between monetary policy and economic growth. While there has been a wide range of studies on the existing relationship between monetary policy and economic growth, the nexus between the two remains inconclusive. This paper takes a comprehensive view of the theoretical evolution of the relationship and the respective recent empirical findings. Overall, this paper shows that the majority of findings support the relevancy of monetary policy in supporting economic growth, mainly in financially developed economies with fairly independent central banks. The relationship tends to be weaker in developing economies with structural weaknesses and underdeveloped financial markets that are weakly integrated into global markets. This paper concludes that monetary policy matters for growth both in the short-run and long-run despite the prevailing ambiguous relationship. The paper recommends intensive financial development measure for developing countries as well as structural reforms to address to supply side deficiencies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Central Banking Theory and Practice ; ISSN: 2336-9205 ; Volume: 7 ; Year: 2018 ; Issue: 2 ; Pages: 123-137 ; Warsaw: De Gruyter Open

Classification and Topics

• Classification: Wirtschaft ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Monetary Policy ; Central Banks and Their Policies
• Subject: Money supply ; Interest rates ; Output stabilisation ; Long run neutrality

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Twinoburyo, Enock Nyorekwa ; Odhiambo, Nicholas M.
• Event: Veröffentlichung
• (who): De Gruyter Open
• (where): Warsaw
• (when): 2018

Further information

• DOI: doi:10.2478/jcbtp-2018-0015
• Handle: http://hdl.handle.net/10419/217647
• Last update: 10.03.2025, 11:44 AM CET