Nexus of Monetary Policy Transmission and Macroeconomic Indicators: An evidence from Emerging Economy


  • ALI SAYANI Director, Sayani Academy, Karachi, Pakistan
  • Ammar Ahmed Siddiqui Assistant Professor, Department of Business Administration, Iqra University Karachi, Pakistan
  • Muhammad Hassan Research Scholar, Department of Commerce, University of Karachi, Pakistan
  • Khurram Pervez Assistant Professor, Department of Business Administration, Iqra University, Karachi, Pakistan



Inflation, Unemployment, GDP, Economic, Growth, Stock Market


The research ascertains the influence of monetary policy on the macroeconomic indicators such as inflation rate, GDP growth, stock price, exchange rate, and balance of payment before and during the COVID-19. The monetary sector is a crucial component of     the economic system, which has always been uncertain. The research estimations are based on 20 years of secondary data collected from authentic sources. The research would help government departments to contemplate on the implications of the monetary policy at the unprecedented time where there is a need to figure out the relevant issues and related solutions. The data collection is for a period before the Covid-19 and is be analyzed using different statistical techniques such as unit root, Vector Auto Regressive (VAR), and Engle granger. The results would be helpful to measure the relationships between inflation and monetary policy, GDP and monetary policy, balance of payment to the monetary policy, exchange rate and monetary policy and the coherence of stock market and monetary policy. All the independent variables have significant impact on money supply and GDP. The research is going to help government to make wise decision about implementing the monetary policy to combat the adverse impacts of macroeconomic indicators especially during unprecedented time.