IMPACT OF MONETARY POLICY ON ECONOMIC GROWTH : MALAYSIA AND SINGAPORE

CHANG, LEE CHENG (2019) IMPACT OF MONETARY POLICY ON ECONOMIC GROWTH : MALAYSIA AND SINGAPORE. [Final Year Project Report] (Unpublished)

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Abstract

This study explores whether connection exists between economic growth and supply of currency, rate of interest and rate of exchange in Malaysia and Singapore over 40 years period starting from year 1979 to 2018. The estimation has been carried out to look into whether there is any correlation between economic expansion and supply of currency, rate of interest and rate of exchange. Unit Root Test, and ARDL Bound test are used in this study. The empirical results show that all variables are stationary at first different in ADF and PP test, exclude KPSS test result show that all elements are stationary at the level exclude the supply of currency is stationary at first difference in Malaysia. For Singapore, all the elements are stationary after first different from the outcome of ADF and PP test, exclude the KPSS outcome show that GDP, rate of interest and supply of currency are stationary at first difference and rate of exchange stationary at level. There is existence of long-term and short-term connection between economic expansion and supply of currency, rate of exchange in Malaysia and Singapore, however there are no long-term and short-term interrelation among rate of interest with economic expansion.

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