Relationship Between The Economic Growth and Monetary Policy

The main objective of conducting this paper was to investigate the existence or lack of relationship between the current monetary policy and economic growth in the economy ofIran. This objective is done in the form of determining the monetary policy and economic growth. This paper is seeking to prove or disprove the relationship between the monetarypolicy and economic growth by applying the econometric method. The applied data in thisstudy is collected by library method and through the reliable sources from 1984 until 2013. The research methodology is this paper is applied based on the objective and correlative andamong Delphi survey techniques in terms of data collection and has the aim to reach the experts' consensus familiar with the research subject. This paper utilizes the auto-correlation, data dispersion normality, validity and accuracy of model, and hypothesis tests in addition tothe estimation of model coefficients based on F test, t test, R-squared value, and Durbin- Watson statistics rate. The main result of this study is the existence of significant positiverelationship between the liquidity and the economic growth. In other words, with a singlepositive change in economic growth, the amount of liquidity is directly changed to 0.034757 units. Furthermore, there is no significant relationship between the rate of exchange andinterest on bank deposits with the economic growth in the economy of Iran.

Keywords:

Monetary policy , Economic growth , Econometrics