Abstract:
This study tests the impact of monetary policy (physical capital, labor force, inflation, money supply, and exchange rate) on the economic growth of Pakistan. This study has included physical capital, labor force, inflation, money supply, and exchange rate as independent variables, whereas economic growth is considered as a dependent variable. This study is based on identifying the magnitude and direction of the relationship between physical capital, labor force, inflation, money supply, and exchange rate (independent variables) and economic growth (dependent variable). An empirical analysis is done based on the secondary data gathered regarding the variables of this study. Various statistical instruments such as correlation, regression, ANOVA, and coefficients, have been used to figure out the relationship between physical capital, labor force, inflation, money supply, and exchange rate and economic growth of Pakistan. Results of these statistical analysis has been interpreted by correlation and regression through a tool known as SPSS Software. It is evident through findings that there exists a strong positive relationship between physical capital, labor force, money supply, and exchange rate, and economic growth of Pakistan. Whereas, there exists a strong negative relationship between inflation and economic growth of Pakistan
