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GDP growth, money growth and inflation are essential to an economy's macroeconomic stability and have a direct impact on the policymaking process. Sri Lanka is currently concerned about high inflation. Inflation is a monetary phenomenon. Inflation has been caused by monetary policy in several nations. According to the economic theories of Karl Marx, Irving Fisher and Milton Friedman, a continuous increase in the money supply causes inflation. This paper aims to investigate the relationship between Sri Lanka's GDP growth, money growth and inflation.

An econometric model and the economic theories of Fisher and Friedman are used to figure out how money supply, inflation and economic growth are linked. Between 1990 and 2021, data were gathered from secondary sources.

The increase in the money supply is found to cause inflation. Inflation has negative effects on both short- and long-term economic growth. Long-term, the increase in money supply has a negative effect on economic growth.

According to research, the money supply and inflation are inextricably linked, and the money supply has a direct impact on economic growth. As a result, the government should have an appropriate monetary policy and proposals to control inflation levels and stimulate economic growth.

The paper adds to the existing literature in two ways. First, it fills in the lack of studies in Sri Lanka, where there are no papers on this important relationship, especially with a modern econometric study. Second, it tries to shed light on the asymmetric shocks (both positive and negative shocks and changes) between the three variables, which was not done in previous studies.

At present, countries are concerned about inflation and the impact of inflation on each country’s economic growth. This inflation has been said by economists that inflation is a phenomenon of currency and currency, which has caused inflation in some countries by their monetary policy. According to the economic theory of Karl Marx, Irving Fisher, Friedman, inflation is caused by a continuous increase in the money supply.

The economic theories of Fisher, Friedman and an econometric model are applied to analyse the relationship between money supply and inflation. Besides, Vietnam’s and China’s research data are also collected in the period of 2012-2016.

It is found out that the continuous increase in the money supply causes inflation in the long-term, but the continuous increase in the money supply growth does not cause inflation in a short time, this was analyzed based on the theory of monetary quantity. Moreover, Chia’s and Vietnam’s correlations of the money supply growth and inflation are 99.1 per cent. These correlations are very close.

Research results show that money supply and inflation are closely related, and the money supply directly affects economic growth. Therefore, the government should have the relevant monetary policy to grow the economy and proposals to make monetary policy, control inflation levels and stimulate economic growth.

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

The purpose of this paper is to provide logical and empirical explanations as to why monetary policy is ineffective with respect to affecting mortgage rates, and thus investment and aggregate demand.

Logical and empirical evidence is provided in support of the hypothesis that changes in the money supply have no significant impact on interest rates in general, and particularly on mortgage rates. This empirical analysis is based on a simple regression of changes in mortgage rates on changes in the money supply, and covers the 1990‐2004 period.

Support was found for our hypothesis that changes in money supply have no significant impact on interest rates.

The conclusion of this paper should be incorporated in all macroeconomics textbooks. Lack of such analyses may leave a confusing or misleading impression about economic theories in the mind of economics students.

One should not rely on monetary policy as an effective tool of stabilization policy.

The message of this paper is to readers of macroeconomics textbooks. This paper has an original value in that it communicates to readers that most macroeconomic textbooks fail to provide detailed and clear explanations as to why very frequently monetary policy does not achieve its objective of stabilizing the economy.

The assignment of targets to instruments in developing countries cannot satisfactorily follow any simple universal rule. Which approach is appropriate is influenced by whether the economy is dominated by primary exports, by the importance of the domestic bond market and bank credit, by the extent of existing restriction in foreign exchange and financial markets, by the presence or absence of persistent high inflation, and by the existence or non‐existence of an active international market in the country's currency. Eighteen observations and maxims on stabilisation policy are tentatively drawn (pp. 64–8) from the material reviewed, and the maxims are partly summarised (pp. 69–71) in a schematic assignment, with variations, of targets to instruments.

This article investigates empirically the determinants of inflation in Saudi Arabia using the quarterly time‐series data over the period 1962:1 to 1981:IV. The basis of this investigation is the monetary approach whereby the roles of both the money‐supply growth and the money‐demand growth are taken into account. Moreover, the potential effect of external monetary factors on the Saudi inflation is genuinely incorporated through the underlying money‐demand function. The proposed monetary model provides an adequate explanation of the Saudi inflationary process. Furthermore, the empirical results exhibit structural stability over time and do not suffer from simultaneous‐equation bias. The empirical results show that external monetary factors (particularly foreign interest rates) and inflationary expectations exert significant positive effects on inflation in Saudi Arabia. Importantly, the results also indicate that money‐supply growth has a quick and powerful positive impact upon the Saudi inflation with a unitary elasticity. Therefore, control over money‐supply growth appears an essential ingredient in any anti‐inflation policy in Saudi Arabia. Such monetary control can only be achieved in Saudi Arabia (and other oil‐exporting countries) through control over domestic government expenditures that have escalated particularly during the past decade.

Presents a paper written by Lauchlin Currie in January 1991 in which he attempts to demonstrate how lack of precision in the use of terms relating to money and savings can lead to a lack of precision in theories, which in turn leads to errors or misunderstandings in policies. Concludes that an essential step to correct the confusion would be the recognition that the most important portion of means of payment is that which performs a distinct service for which there is a demand, and which entails a cost for which the community is prepared to pay.

Attempts to look into the question of causality between money and prices in the context of international comparison in four South‐east Asian developing countries, based on an improved methodology. Thailand, Malaysia, Singapore, and the Philippines were used as case studies. Regarding the money‐price causality direction, the study based on both bivariate and multivariate tests, tends to suggest strongly that in those four countries during much of the three decades since 1960, it was money supply that was the leading variable as the monetarists maintain and not the other way around as the structuralists maintain.

The paper aims to address how firms make strategic adjustment to the changing resource availability in different monetary policy conditions and how the stickiness of cost influences the strategic adjustment, and to dig out the major internal and industrial factors that influence the relationship between strategic change and monetary policy conditions.

The mechanism of how monetary policy affects strategic change is expounded by resource-based view and transaction cost theory. The balanced panel data of 422 companies of manufacturing industry listed in Chinese A share market before the end of 2003 from 2004-2013 are selected as sample to test the theoretic hypotheses.

It was found that looser monetary policy results in greater strategic change than the tighter one for the high adjustment cost. External capital dependence and industrial competition intensity strengthen the positive correlation between monetary policy condition and strategic change. Private firms are more susceptible to money supply condition change compared with state-owned enterprises. Companies tend to expand investment on fixed asset but to shrink investment on R & D and trademark in looser money supply condition.

Companies make bigger strategic adjustment in looser monetary policy condition for the greater availability of financial resources and lower market risk, but smaller adjustment in the tight one. However, owing to the sunk cost and the high adjustment cost, companies are not suggested to make aggressive strategic adjustment in the loose monetary conditions so as to avoid overcapacity and financial risk in tight monetary policy condition. For the policy-maker, as loose monetary policy cannot stimulate innovation but boost expansion on capacity, it is better to strengthen the resources configuration mechanism of monetary policy when making monetary policy.

This paper fulfils a theoretic gap to study the mechanism of how monetary policy influence corporate strategic resource reconfiguration via affecting the resource base of a company by combining resource-based view and transaction cost theory.

The purpose of this research is to present an Islamic monetary theory of value by analyzing real prices and real money in terms of gold and silver in Egypt from 696 to 1517, a period of 821 years from the Umayyads to the Abbasids.

This paper adopts a quantitative empirical investigation derived from a full population of secondary data to deductively evaluate the measure and store of value functions of money, to affirm an Islamic monetary theory of value, which is also inductively researched through a qualitative interpretation of documentary and content analysis of Islamic and numismatic literature.

The Islamic monetary theory of value leads to an Islamic equation of exchange that reconfirms the outcome of this research, where a high value of money ensures low constant real prices over the long term.

The findings are based on an empirical investigation involving a single price of wheat series as a reasonable proxy for changes in wholesale commodity prices generally, which was successfully adopted by other studies.

The significance for modern monetary policy is that monetary authorities should adopt an Islamic monetary theory of value to achieve genuine monetary and price stability.

Through an Islamic equation of exchange, price stability would ensure real economic growth that protects wealth for holders of money due to a stable purchasing power, and combined with Islamic equity finance, more efficiency in allocating investible resources to increase gross domestic product and employment.

The Islamic monetary theory of value ensures that there is no transfer or confiscation of wealth through inflation, which would impart gains to the issuer due to the excessive supply of money in relation to demand.