Abstract:
As a contribution to an overall effort and research work
by different economists and our policy makers to find the
appropriate monetary policy initiatives for steering the
economy in the right direction in the prevailing
recession, the present study thoroughly examined the
effects of present tight monetary policy, followed by the
state bank of Pakistan, on our national economy with the
view to suggest appropriate changes for making the policy
most suitable to bring the national economy out of the
forth-coming dangers posed by the prevailing recession.
The effects of the monetary policy were evaluated in
depth to ascertain whether the policy is meeting its
objectives in the prevailing economic conditions created
by the recession. The specific dependant measures were
the economic growth rate and inflation. No significant
evidence was found to support the stance of State Bank of
Pakistan for implementing the tight monetary policy to
control the inflation and put the economy back on the
growth track. Based on the findings of the study, a
comparatively cheap monetary policy has been recommended.
