A study on the relationship between money supply and macroeconomic variables in some selected middle eastern countries

Knowing the relation between macroeconomic variables and money supply could be mentioned as a proper strategy and approach to evaluate the economic condition of several Middle Eastern counties. Researchers and economists concentrated on regional development and the elements that drive regional economic growth, such as money supply, because it is sensitive and significant and directly influences economic movement. In addition, its influence on the economic movement can produce a harmonic effect on other variables, including inflation, economic growth, interest rate, exchange rate, investment, and real GDP (Gross domestic product). As it's well-known, growth in money supply becomes a factor to increase inflation rate associated with economic growth and interest rate will remain unchanged as a result of rising general prices and rising money demand.The influence of money supply on the economy was evaluated by examining and assessing the financial system's influence on the income advancement of four countries (Iraq, Turkey, Iran, and Egypt) for the period of (1980 to 2019). This research obtained data from the Data Market, World Development Indicator, and World Bank databases. To achieve this objective, theoretical economic model applications and econometrics models, such (ARDL) as well as panel estimation (fixed and random effects model). The descriptive statistics show that the distribution of the sequence under investigations is normal through applying the empirical determination process. Sequences properties have been examined by utilizing a unit root test and all of the series found will be integrated in the first order. Furthermore, the Johansen cointegration test was accomplished to determine the long association amid the factors, and the findings revealed a long-term link amongst or among the different factors. Long run relation shows that both LMS2L and LINVST have proper or strong relations (positive) with the global GDP variable. Furthermore, LMS2 and LINVST have a statistically significant favorable impact on GDP (0.88 and 0.53), respectively. More clearly, in the case of changing LMS2 by 1%, GDP value rise by 0.88% and increasing LINVST by 1% will lead to raising GDP by 0.53%.