MONETARY POLICY AND ECONOMIC GROWTH: EVIDENCE FROM TUNISIA USING ARDL BOUND TESTING APPROACH

Abstract

This study aims to assess the effectiveness of monetary policy in Tunisia by trying to identify the monetary policy effect on the economic growth rate, and for this purpose, ARDL approaches were used from annual data from the period 1987-2019. It appears from this study that the velocity of money (LV) and the interest rate (IR) ​​at period zero (current period) had a significant and positive effect on growth in Tunisia, while net assets in currencies (LNAC) had an insignificant and positive effect on growth in Tunisia. Similarly, the results showed that the inflation rate (LINF) and the interest rate (IR) ​​at a lag of two years (t-2) have a negative and significant effect on growth in Tunisia. Therefore, price stability is not conducive to the development of economic activity, but it simply allows the economy to maintain itself.