The Impact Of Monetary Expansion On Economic Growth In Pakistan

The objective of this research paper is to analyze the impact of monetary expansion on economic growth in Pakistan. We used time series data of past 45 years (1972-2014) for analysis. The selected variables include gross domestic product, money supply, intra industry trade, total enrollment, inflation rate, government expenditure and total number of beds. ARDL model was used to determine long run and short run relationship between variables. The results show that intra industry trade, total enrollment, inflation rate and money supply have positive relationship with GDP while government expenditure and total number of beds have negative relationship with GDP in the long run. The results also show that money supply, intra industry trade, total enrollment, inflation rate and number of beds have positive relationship with GDP while government expenditure has negative relationship with GDP in the short run.