TY - JOUR
T1 - Money Supply, Banking and Economic Growth
T2 - A Cross Country Analysis
AU - Alharbi, Ahmad
AU - Sbeiti, Wafa
AU - Ahmad, Moid
N1 - Publisher Copyright:
© 2024, Econjournals. All rights reserved.
PY - 2024/3/18
Y1 - 2024/3/18
N2 - The primary objective of the research is to understand the interactions between money supply, banking and economic growth for effective policy interventions and business decisions. Based on annual data for the time period (2004-2021), descriptive analysis, correlations, causality tests and panel data regressions are analyzed for a sample from India, Saudi Arabia and UAE to draw conclusions. The results favored the “intermediation theory” and were contrary to the “credit creation” theory of banking. It was observed that the GDP of a country can be efficiently explained by financial soundness, broad money, loans and deposits for a country. Also, that the GDP of a country influences banking loans and deposits but not vice versa. The monetary policy of the sample was questioned by the finding that GDP causes banking loans and banking deposits but not vice versa. This important finding will add to the effectiveness in business decision making.
AB - The primary objective of the research is to understand the interactions between money supply, banking and economic growth for effective policy interventions and business decisions. Based on annual data for the time period (2004-2021), descriptive analysis, correlations, causality tests and panel data regressions are analyzed for a sample from India, Saudi Arabia and UAE to draw conclusions. The results favored the “intermediation theory” and were contrary to the “credit creation” theory of banking. It was observed that the GDP of a country can be efficiently explained by financial soundness, broad money, loans and deposits for a country. Also, that the GDP of a country influences banking loans and deposits but not vice versa. The monetary policy of the sample was questioned by the finding that GDP causes banking loans and banking deposits but not vice versa. This important finding will add to the effectiveness in business decision making.
KW - Banking
KW - Broad Money
KW - Financial Soundness
KW - GDP
KW - Panel Data
UR - http://www.scopus.com/inward/record.url?scp=85190141832&partnerID=8YFLogxK
U2 - 10.32479/ijefi.15749
DO - 10.32479/ijefi.15749
M3 - Article
AN - SCOPUS:85190141832
VL - 14
SP - 234
EP - 242
JO - International Journal of Economics and Financial Issues
JF - International Journal of Economics and Financial Issues
IS - 2
ER -