THE IMPACT OF MONETARY POLICY ON ECONOMIC GROWTH IN DEVELOPING COUNTRIES FOR THE PERIOD 2010-2020 (MALAYSIA AS A MODEL)

Abstract

Monetary policy is one of the important terms that touched the reality of economics literature, since the nineteenth century, and the development of its path in the twentieth century and the beginning of the twenty-first century, through the economic interest in addressing issues related to monetary policy, resulting from the problems of recurring economic cycles. In this context, monetary policy is the cornerstone of building macroeconomic policy, just like fiscal policy, as it is one of the basic components of economic policy, and it has a perceptible impact on the macroeconomic situation. It is worth noting that the monetary policy, which is the procedures adopted by the government, specifically the monetary authorities, to manage the money supply and the interest rate, with the aim of achieving or maintaining full employment without inflation with the aim of achieving a specific economic goal, such as full employment, and in this sense it includes expansion and contraction in Amount of cash in circulation. This policy differs from one economic system to another. It is different in advanced capitalist economies than in developing countries. Because of this state of disparity, Malaysia was chosen as one of the emerging developing countries in the study of the impact of monetary policy on economic growth, given that Malaysia has a distinguished experience that was able to make remarkable strides in achieving development and economic growth, after realizing the impact of the development policy based on self-reliance and the provision of the environment. This approach is based on realizing the strong link between the success of monetary policy in using its tools to achieve its goals on the one hand, and the development of economic growth on the other. In this context, the researcher dealt with (the impact of monetary policy on economic growth), because monetary policy is one of the most important pillars of the work of central banks in general.