Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195520 
Year of Publication: 
2018
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 12 [Issue:] 2 [Publisher:] University of Finance and Management in Warsaw, Faculty of Management and Finance [Place:] Warsaw [Year:] 2018 [Pages:] 207-222
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
The role of monetary policy in promoting economic growth remains empirically an open research question. This paper attempts to bridge the knowledge gap by investigating the impact of monetary policy on economic growth in Tanzania during the period from 1975 to 2013, using the autoregressive distributed lag (ARDL) bounds-testing approach. To our knowledge, this study may be the first of its kind to examine in detail this nexus in Tanzania. The study uses two proxies of monetary policy, namely, money supply and interest rate, to examine this linkage. The empirical results of this study reveal no impact of monetary policy on economic growth in the long term - irrespective of the proxy used to measure monetary policy. However, the short-term results confirm the existence of monetary policy neutrality - but only when the interest rate is used as a proxy for monetary policy. When money supply is used to measure monetary policy, a negative relationship between monetary policy and economic growth is found to predominate. The study findings suggest that monetary policy may not be a panacea for economic growth in Tanzania.
Subjects: 
Monetary policy
economic growth
interest rate
money supply
JEL: 
E1
E43
E51
E52
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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