Linkage between monetary instruments and economics growth
(HUNFA MARIYAM, Faisalabad)
The goal and objective of the study are to the
analysis the relationship between the monetary policy and economic growth and
other variable. The research is important from empirical and theoretical both
point of view. There are negative effect to the economy. These variable are more
effected to the economic growth. A central bank has a high power to maintain the
situation to the economy. Central bank are control external r internal value of
money. Monetary policy influence the aggregate demand and supply effecting the
economy growth. Due to hyper inflation under saving are low , then bad impact to
GDP because people are low saving and low investment . both aggregate demand and
supply are effecting in the long run. The notion that inflation forests growth
has died a long , create a problem economic . the inflation buys growth idea
still lives in public policy . it is right that a effected both of inflation can
temporily FOOL an economy into growing faster then it other wise world. The
country are not moving from high inflation to low inflation will not bear spme
short term adjustment cost. There is a non linear relationship b/wthe inflation
and GDP .the statistically significant positive affect on GDP growth.
BARRO and SALA-I-MARTIN [1990] went further and postulated a gobal market for
capital in which the interest rate is determined via the relation ship b/w thje
demand and supply {desired saving] . they use the stock market as a proxy for
variation in investment demand and change in price of commodities to accountant
for change in the income and desire saving.
According to caradian economy [2010]
Inflation overstates the nominal GDP against its real value. The real income
decrease and standard of living is also decreased if money supply is increase to
the lead.
This is conclude and determine the practical significance of the study .which
may be used in the decision making process of monetary and economy growth of the
country. These variable are effacting to the direct and indirect both way to the
economic growth.