Interactions amongst macro-economic variables: New global evidences

Abstract

Monetary and economic policy of a country considers different macroeconomic variables for an effective and desirable economic growth.  The paper is aimed to understand the inter variable impact of five macroeconomic variables across a sample of 63 countries.  The research is based on a panel data for the period 2000-2023(annual data) and applies the panel data technique along with causality analysis to understand and assess the relevant macro-economic dynamics. Apart from descriptive analysis, correlation and regression analysis is also done to draw conclusions. A bidirectional relationship is observed between GDP, Money supply and exchange rates, which is validated by correlation analysis, causality analysis and VAR results.