Money Supply and Economic Growth in Botswana: Evidence from ARDL Approach

Author(s)

Lucky Tuzuka Musikavanhu , Gladys Gamariel ,

Download Full PDF Pages: 130-138 | Views: 585 | Downloads: 153 | DOI: 10.5281/zenodo.4990666

Volume 9 - October 2020 (10)

Abstract

the purpose of the paper is to analyse the relationship between money supply and real gross domestic product using an Auto Regressive Distributed Lag (ARDL) model on Botswana from 1989 to 2019. The impact of money supply on economic growth is positive and negative in both the short run and long run respectively. However, the impact is insignificant in support of the monetarist view. Results suggest that monetary policy framework does not play an important role in determining economic activities of Botswana hence there is need to improve the quality of monetary institutions for money supply to be effective in influencing economic performance of Botswana. The results seem to suggest that policy makers should consider stimulating economic activity in Botswana through fiscal policy rather than monetary policy

Keywords

Money Supply, Economic Growth

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