IMPACTS OF MONEY SUPPLY, GROSS DOMESTIC PRODUCT AND EXCHANGE RATES ON INFLATION IN CASE OF BAHRAIN AND KUWAIT: AN ECONOMETRIC ANALYSIS USING ARDL APPROACH

Khawaja Asif Mehmood; Farzana Munir; Muhammad Zahir Faridi; Shama Tahir

Authors

Dr Khawaja Asif Mehmood Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Punjab, Pakistan.
Dr Farzana Munir Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Punjab, Pakistan.
Professor Dr Muhammad Zahir Faridi Professor, School of Economics, Bahauddin Zakariya University, Multan, Punjab, Pakistan. (Corresponding Author)
Shama Tahir MPhil Scholar, School of Economics, Bahauddin Zakariya University, Multan, Punjab, Pakistan.

Keywords:

Inflation, Money Supply, Exchange Rate, GDP, ARDL

Abstract

The present study has endeavored to analyze the impacts of money supply, gross domestic product and exchange rates in case of Bahrain and Kuwait. The study collected the data from the World Development Indicators for the fifty years from 1971 to 2021 for these two countries. To find the empirical results, the Auto Regressive Distributive Lag (ARDL) model has been incorporated. The results highlighted that the gross domestic product, broad money supply, and exchange rates have the strong statistical and significant relationships with the inflation in case of both the countries of the Gulf Cooperation Council (GCC). Policy recommendation is to keep these macroeconomic contents in consideration while inflationary targets are set.

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