The Impact of Money Supply on the Economy: A Panel Study on Selected Countries

Javier de Oña García Matres (Thomas H. Albinson School of Business, West Virginia Wesleyan College, Buckhannon, WV 26201, USA)
Tuan Viet Le (Thomas H. Albinson School of Business, West Virginia Wesleyan College, Buckhannon, WV 26201, USA)


This study investigates the impact of money supply on economic growth rate, inflation rate, exchange rate and real interest rate. We used a panel of 217 countries from 1960 to 2020 and four different models to address these questions. The empirical results support the quantity theory of money. In addition, the study found evidence for a negative relationship between real interest rate and inflation and between money supply and real interest rate. Finally, our results show that lagged money growth rate is positively correlated with GDP growth rate but money growth rate is negatively correlated with GDP growth rate.


Money supply; Economic growth; Inflation; Real interest rate; Real exchange rate

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