Money Supply Influencing on Economic Growth Wide Phenomenon of AEC Open Region

This paper undertakes a thorough investigation into the intricate relationship between the money supply and economic growth within the ASEAN Economic Community region. This region spans across diverse countries such as Thailand, Indonesia, and Singapore, alongside several others, thereby providing a rich and varied landscape for this study’s analysis. The research delves into an extensive examination of a wide array of secondary data pertaining to GDP growth rates and various components of the money supply, such as narrow money and demand deposits. These data sets are meticulously scrutinized over a robust nineteen-year timeframe, stretching from the year 1995 to 2025. To shed light on the dynamics at play, the study employs sophisticated panel unit root and panel ARDL models, utilizing the Pooled Mean Group Estimator to glean insights into both short-term fluctuations and long-term trends. As the findings unfold, it becomes apparent that certain key variables exhibit distinct characteristics; notably, narrow money and demand deposits emerge as stationary entities, contrasting with the non-stationary behavior observed in GDP growth rates. Crucially, the analysis uncovers a compelling pattern of a robust long-term correlation between the money supply and economic growth within the region, underscoring a noteworthy speed of adjustment towards achieving a sustainable long-term equilibrium.