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The objective of the study is to examine the relationship between money supply, price level and economic growth in the context of Pakistan by using Autoregressive Distributed Lag (ARDL) model, covered a period of 1980 to 2016. The results confirm the long-run relationship between the variables while using broad money supply as a response variable. However, in the price and income modeling, the variables do not support the cointegration relationship between the variables. The causality results confirmed the unidirectional relationship running from income to money supply, which implies that income do causes money supply in the short run, whereas money supply leads to inflation to support Monetarist view of inflation in a country. The results conclude that economic growth is imperative to stabilize money supply and price level through sound economic policies in a country.


The main purpose of the article is a critical analysis of the monetary policy strategy that is based on the adoption of money supply as an intermediate target. The analysis is conducted from the perspective of the theory of the Austrian school. The first part of the article presents an influence of the supply of money on changes of categories in economy according to mainstream theories of economics. The second part discusses the essence of the strategy of monetary policy using money supply as an intermediate target from the point of view of the main trend in economics. It is demonstrated that in order to use it, two elementary conditions must be met: the function of demand for money must be at least relatively stable and the central bank must practically shape changes in the money supply at the planned level. The third part is of key importance for the purpose of this article. It involves the criticism of Friedman’s principle, i.e. a constant increase in money supply as a monetary strategy. According to the Austrian theory, an increase in the quantity of money which is not financed by voluntary savings separates the time structure of production and consumption. Thus, after the period of prosperity there a collapse in production must take place. It is also pointed out that the crisis can be postponed only when the quantity of money increases at an ever faster rate.


In this paper we test the existence of long-term relationship between money supply and inflation, money supply and GDP and money supply and unemployment. Three independent panel cointegration regressions are evaluated where money supply is the explanatory variable, while inflation, GDP and unemployment rates occur as dependent variables. The sample consists of 17 countries (Australia, Canada, Chile, Denmark, Israel, Japan, South Korea, Mexico, New Zealand, Poland, Switzerland, United Kingdom and United States). The data are annual and refer to the period from 1990 to 2013. The results of the empirical analysis in this paper show that there is no significant long-term relationship between inflation and money supply, while there is statistically significant long-term relationship between GDP and money supply, as well as between unemployment rates and the money supply.

References Ahmed, A. E. M. and S. Z. Suliman (2011); “The Long-Run Relationship between Money Supply, Real GDP, and Price Level; Empirical Evidence from Sudan”. Journal of Business Studies Quarterly , Vol. 2, No. 2, Pp 68-79. Ajisafe, R.A & Folorunso, B.A. (2002); The relative effectiveness of fiscal and monetary policy in macroeconomic management in Nigeria; African Economic and Business Review , vol.3, no.1. Akinbobola, T. O. (2012); The dynamics of money supply, exchange rate and inflation in Nigeria; Journal of Applied Finance and Banking ; vol.2, no. 4


This research aims to analyse the response of the Bank Indonesia (BI rate) to the Indonesian economic stability. The data analysis is stationarity test, model stability test, lag determination, Structural Vector Autoregression (SVAR), Impulse Response Function (IRF), and Variance Decomposition (VD). The research data is obtained from the publication provided by the Federal Reserve Data (FRED), the Bank Indonesia, and the Central Bureau of Statistics. The data used is since the third quarter of 2005 to the first quarter of 2017. The research results showed that the variable of the federal funds rate (FFR) significantly influences the exchange rate and the Consumer Price Index (CPI), but it does not significantly affect the BI rate, the amount of the money supply (M2), and Gross Domestic Product (GDP). The result of the IRF test showed that the BI rate, the amount of money supply, exchange rate (IDR/USD), GDP, and CPI positively and negatively respond the FFR change. The result of VD test indicated that the variation of the BI rate, the currency exchange rate, and CPI are mostly caused by the FFR variation.


Research Background: The on-going debate concerning the exact relationship that exists between inflation and government expenditure especially in the long and short run prompted this research.

Purpose: The study assesses the relationship between government expenditure and inflation in Nigeria. Apart from government expenditure and inflation rate, other variables such as exchange rate and money supply are included to ensure a robust model.

Research Methodology: Secondary data from 1980 to 2017 were collected and analysed using the Johansen Cointegration analysis and vector error correction model.

Results: The results showed that apart from the bi-directional relationship that exists between the variables, there exists a strong relationship between government expenditure and inflation rate and that a significant impact is sustained from the short run through the long run. The exchange rate and money supply also exhibit a strong association with government expenditure.

Novelty: The study has underscored the importance of the inflation rate in Nigeria as it affects government spending by focusing more on inflation rather than the movement that was the focus of most of the previous studies. It has also shown the causality flow from both inflation and government expenditure, which hitherto remains contentious.

.S. and Ekone, A. F. (2010). Money supply –economic growth nexus in Nigeria. Journal of Social Sciences , Vol. 22, No. 3, pp. 199 – 204. 48. Onyeiwu, C. (2012). Monetary policy and economic growth of Nigeria. Journal of Economics and Sustainable Development , Vol.3, pp. 7. 49. Palley T.I. (2007). Macroeconomics and monetary policy: Competing theoretical frameworks. Journal of Post Keynesian Economics , Vol. 30, No.1, pp. 61-78. 50. Rafiq, S. M. and Mallick, K.S. (2008). The effect of monetary policy on output in EMU3. A sign restriction approach. Journal of


The subject of this paper is the research of the electronic banking services market in the South Bačka region. The aim of this paper is to systematise the supply of services by commercial banks. On the other hand, the aim of the paper is to evaluate the extent to which citizens use electronic banking services. The research methodology includes the application of the analytical method to the evaluation of the banking sector’s supply of services, the survey method and the statistical processing of data in the empirical analysis of demand. The results of the research showed that there is a rich offer of electronic banking services in the Republic of Serbia and that it is widely accepted.

References Ahmad, N., ve Ahmet F. (2006), "The Long-run and Short-run Endogeneity of Money Supply in Pakistan: An Empirical Investigation", State Bank of Pakistan-Research Bulletin , Vol. 2, No. 1 Cottrell, A. (1994). "Post Keynesian Monetary Economics: A critical survey." Cambridge Journal of Economics , 18(6), ss.587-605. Dickey, D. A. ve Fuller, W. A. (1981), "Likelihood Ratio Statistics for an Autoregressive Time Series with a Unit Root", Econometrica , 49, 1057-72. Engle, R. F. ve Granger, C. W. J. (1987), "Co-integration and Error Correction

them. Quite a few studies have tested the monetary approach to exchange rate determination and some of the earlier ones are collected in Frenkel and Johnson (1978)” ( Hartley 1983 ). Monetary models based on purchasing power parity of exchange rates determine the impact of the money supply, national income and interest rates on the formation of the national currency to the foreign currency. Equally important are the foundations of the Keynesian theory (I. Fisher, 1925 and J. Keynes, 1978), according to which “it was recommended to reduce the rate of the national