Impact of Money Supply on Economic Growth: A Study of the United Arab Emirates

摘要

Money supply or money stock is the total amount of money available in an economy at a particular point in time. Money supply plays a dominant role in the economy and shows its possible effects on the price level, inflation and the business cycle. The relationship between money supply and economic growth has been receiving increasing attention than any other subject matter in the field of monetary economics in recent years. The present paper investigates the impact of money supply on economic growth in United Arab Emirates between 2000 and 2010. The data for the study has been collected mainly from the statistical publications of central bank of United Arab Emirates. To find out the impact of money supply on the GDP, SPSS software is used for statistical computations. The Ml, M2 and M3 were independent variables and the GDP of the UAE and the inflation rates were the dependent variable. The set hypothesis for the study is that the money supply is not positively related growth and inflation and it is however significant to GDP growth rates on the choice between contractionary and expansionary money supply. Since, the study is limited to money supply, economic growth and inflation in UAE, other related factors are ignored.