Impact of Money Supply on Sri Lankan Economy: An Econometric Analysis

Aslam, A.L.M.

doi:10.18052/www.scipress.com/ILSHS.67.11

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Impact of Money Supply on Sri Lankan Economy: An Econometric Analysis

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Abstract:

Economists argue that the money supply positively impact on economic growth of nations. In Sri Lankan context this statement was not tested econometrically. Therefore, the aim of this study was to scrutinize the impact of money supply on Sri Lankan economy. To exam this objective, this study considered the time series data from the period of 1959 to 2013 and used two types of variables such as dependent and independent variables. Here, the gross domestic product was considered as dependent variable, and Money supply, Exchange rate, Exports earnings, Imports outflow, the Colombo consumer price index were deemed as independent variables. In the meantime, the multivariate econometric method was used to test the impacts of money supply on economic growth of Sri Lanka. According to the analytical results, the money supply has kept positive impact on the economic growth of Sri Lanka at 1% significant level. The R-squared of the estimated model was 92% which was indicated that the estimated model was desirable. Meanwhile, the Durbin Watson test statistic was 2.43 and also the Breusch –Godfrey serial correlation LM test results was greater than 5%. Therefore, these statistics indicated that, the estimated model was not suffering from serial correlation.

Info:

Periodical:

International Letters of Social and Humanistic Sciences (Volume 67)

Pages:

11-17

DOI:

https://doi.org/10.18052/www.scipress.com/ILSHS.67.11

Citation:

A.L.M. Aslam, "Impact of Money Supply on Sri Lankan Economy: An Econometric Analysis", International Letters of Social and Humanistic Sciences, Vol. 67, pp. 11-17, 2016

Online since:

March 2016

Authors:

A.L.M. Aslam

Keywords:

Colombo Consumer Price Index, Economic Growth, Exchange Rate, Exports Earnings, Imports Outflow, Money Supply

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Distribution:

Open Access

This work is licensed under a
Creative Commons Attribution 4.0 International License

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[1] A. Aslam, S. Ahamed Lebbe, "Impact of Fiscal Deficit on Inflation in Sri Lanka: An Econometric Time Series Analysis", International Letters of Social and Humanistic Sciences, Vol. 70, p. 8, 2016

DOI: https://doi.org/10.18052/www.scipress.com/ILSHS.70.8

[2] D. Doan Van, "Money supply and inflation impact on economic growth", Journal of Financial Economic Policy, Vol. ahead-of-print, 2019

DOI: https://doi.org/10.1108/JFEP-10-2018-0152

[3] A. Jayasundera, "The Economy Base of Tourism Industry in Sri Lanka", Financial Markets, Institutions and Risks, Vol. 5, 2021

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[4] P. Iorember, G. Jelilov, N. Alymkulova, P. Yua, "Reconsidering the nexus between monetary policy and economic growth in Nigeria: The role of interest rate, money supply, and financial inclusion", International Social Science Journal, 2022

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[6] K. Osinusi, N. Lawal, S. Bisiriyu, "Trade Balance, Exchange Rate and Money Supply in Nigeria: Growth Implications and Lesson for African Countries", Management & Economics Research Journal, Vol. 4, p. 25, 2022

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[7] K. Osinusi, N. Lawal, S. Bisiriyu, "Trade Balance, Exchange Rate and Money Supply in Nigeria: Growth Implications and Lesson for African Countries", Management & Economics Research Journal, Vol. 4, p. 25, 2022

DOI: https://doi.org/10.48100/merj.2022.213

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