Impact of Monetary Policy on Economic Growth in Pakistan: Evaluation and Analysis

Abstract

Central bank of any country conducts the monetary policy to minimize the economic fluctuations. Monetary policy effects the financial and economic decisions of the people. Objective of the study is to evaluate the impact of monetary policy on the economy of Pakistan in the light of Monetarist and Keynesian views. The Ordinary Least Squares technique is used to evaluate the impact of monetary policy on economic growth. It is evaluated contractionary monetary policy is not fruitful to stimulate the economic growth. It is also concluded that the monetary authorities of Pakistan cannot control money supply changes although they are able to influence such changes.