IMPACT OF MONEY SUPPLY AND INTEREST RATE ON THE ECONOMIC GROWTH OF ECOWAS COUNTRIES

This study examines the impact of money supply and interest rate on the economic growth of ECOWAS countries using the Autoregressive Distributed Lag (ARDL) approach. Specifically, the study aims to determine the relationship between money supply and interest rate in ECOWAS countries, assess the long-run relationship between money supply, interest rate, and economic growth, and evaluate the impact of money supply on Gross Domestic Product (GDP) within the region. The ARDL model was employed due to its suitability in handling variables with different orders of integration. The findings reveal significant short-run and long-run interactions among the variables, indicating that both money supply and interest rate play crucial roles in influencing economic performance across ECOWAS countries. Based on these findings, it is recommended that ECOWAS countries adopt a more flexible and country-specific monetary policy framework that takes into account the unique economic conditions of each member state to promote sustainable economic growth.