The Impact of Monetary Policy on Economic Development: Evidence from Lao PDR

1
Khaysy Srithilat
Khaysy Srithilat
2
Gang Sun
Gang Sun
3
Maketta Thavisay
Maketta Thavisay
1 Dongbei University of Finance and Economics

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This paper examines the impact of monetary policy on the economic development by using annual time series data from 1989-2016. The unit root testing result suggests that all variables are stationary at first difference; therefore, the Johansen Cointegration and Error Correction Model has been employed to analyze the association between variables. The finding shows that money supply, interest rate and inflation rate negatively effect on the real GDP per capita in the long run and only the real exchange rate has a positive sign. The error correction model result indicates the existence of short run causality between money supply, real exchange rate and real GDP per capita.

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No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Not applicable for this article.

Khaysy Srithilat. 2017. \u201cThe Impact of Monetary Policy on Economic Development: Evidence from Lao PDR\u201d. Global Journal of Human-Social Science - E: Economics GJHSS-E Volume 17 (GJHSS Volume 17 Issue E2): .

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Crossref Journal DOI 10.17406/GJHSS

Print ISSN 0975-587X

e-ISSN 2249-460X

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GJHSS-E Classification: FOR Code: 140202
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v1.2

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May 3, 2017

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English

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This paper examines the impact of monetary policy on the economic development by using annual time series data from 1989-2016. The unit root testing result suggests that all variables are stationary at first difference; therefore, the Johansen Cointegration and Error Correction Model has been employed to analyze the association between variables. The finding shows that money supply, interest rate and inflation rate negatively effect on the real GDP per capita in the long run and only the real exchange rate has a positive sign. The error correction model result indicates the existence of short run causality between money supply, real exchange rate and real GDP per capita.

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The Impact of Monetary Policy on Economic Development: Evidence from Lao PDR

Khaysy Srithilat
Khaysy Srithilat Dongbei University of Finance and Economics
Gang Sun
Gang Sun
Maketta Thavisay
Maketta Thavisay

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