Abstract
Monetary policy has remained one of the most fundamental
topics in macroeconomics. From the beginning of
macroeconomic history, various arguments have been given
on the role of money in affecting the real economic activity but
in this regard the evidence is inconclusive. A lot of empirical
work has been done on the stance of monetary policy with a
variety of approaches and still this process is continued. The
present study aims to critically analyze some important studies
for Pakistan concerning the money and income relationship.
The analysis in the study reveals that almost all these studies
on the issue suffer from some methodological problems and
their findings do not decide conclusively whether money
responds to economic activity or monetary policy does not
supplement the process of output growth in a significant way.
It is not easy to diagnose how differences in statistical
procedures affect these results.
Faiz Bilquees, Tahir Mukhtar. (2015) Money and Income Relationship in Pakistan: A Critical Review, The Dialogue, Volume 10, Issue 4.
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