Effect of Monetary Policy Instruments on Economic Growth: An Ordinary Least Square Approach

Economists and policymakers dispute how much monetary policy affects economic growth. India is a fascinating case study due to its complex socio-economic milieu. The study examined how India's monetary policies have affected GDP, inflation, and balance of payments. The study analyzed 2000–2020 data using Ordinary Least Squares. Changes in the money supply caused by monetary policy lower inflation while improving GDP and the balance of payments. The analysis found that monetary policy control of interest rates, currency exchange rates, and liquidity improves investment conditions. The money market also has to meet the increased expertise of market participants by providing a more significant assortment of financial products. The topic is money policy, economic development, transmission, and money flow.