The impact of monetary variables on the economic growth and sustainable development: case of selected countries


For establishing the best monetary policy it is essential to know if in practice monetary variables determine gross domestic product (GDP) in constant prices. Price stability contributes to the formation of stable environment for the development of commercially sustainable activities and expresses the responsibility of central banks for sustainable industrial development. It contributes to maximizing the GDP, employment, stable interest rates and sustainable economic development which have consequences for households’ welfare as well as enterprises’ value maximization. For a set of more monetary variables, we identified that in Romania money aggregates M2 and M3 as well as internal credit were strongly correlated with GDP over the time period 1995:Q1-2015:Q4, while in Slovakia only M2 and M3 were strongly correlated with GDP in the same time period. Contrary to expectations, according to a Bayesian linear regression, the internal credit changes had a negative impact on economic growth on the overall period. This conclusion is consistent with other empirical studies. This paper’s analysis discovered that the aforementioned negative correlation is due to the crisis period, because the regime-switching Bayesian model indicated that only in times of economic contraction changes in internal credit negatively affected economic growth.


money, Gross Domestic Product (GDP), credit, regime-switching model, Bayesian model, sustainable development

JEL classifications

C11 , C13 , C51






Korauš, Antonín
Pan-European University
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Simionescu, Mihaela
Institute for Economic Forecasting
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Bilan, Yuriy
Tomas Bata University in Zlín
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Schönfeld, Jaroslav
University of Economics, Prague
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Journal of Security and Sustainability Issues

Issue date



ISSN 2029-7017 (print)
ISSN 2029-7025 (online)


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