The effect of monetary policy decisions on economic growth: an econometric analysis on mint countries

Economic growth is one of the most important goals of economic policy. There is no common view in economic literature on whether fiscal policy or monetary policy provides economic growth. The effect of monetary policy on economic activity has long been a subject of debate. Although there is no consensus on its effect on the real economy within the framework of theoretical approaches, there is a general belief that it indirectly provides economic growth. However, the existence of different results on this subject in empirical literature has necessitated this study on the monetary policy-growth relationship. In this study, first, general information about monetary policy is given. The monetary transmission mechanism is explained, and its channels are included in the study. Then, brief information is given on economic growth. Then, the theoretical literature on the economic growth-monetary policy relationship is explained and the empirical literature is added to the study. In our thesis, to measure the monetary policy-economic growth relationship, the effect of monetary policy decisions on economic growth was tested with the ARDL bounds test approach using annual data from Mexico, Indonesia, Nigeria and Turkiye (MINT) for the period 1997-2023. GDP, inflation, monetary growth, loans given by banks to the private sector, real effective exchange rate and deposit interest rates representing growth were used as dependent variables. Separate time series were used for each country. According to the findings, in the long term, the monetary policy-economic growth relationship is negative and insignificant in Mexico and Nigeria, while in Turkiye, there is a positive and insignificant relationship. In Indonesia, this relationship is negative and significant in both the short and long term. In Mexico, the short-term results of the monetary policy-economic growth relationship are positive and significant. While this relationship is negative and significant in the short term in Nigeria, no such relationship is found in the short term in Turkiye.