Klodian MUÇO, Arjola MITAJ & Ermonela RUSPI
Abstract The debate between monetarists and Keynesians is related to the possibility that economic policy authorities, have to modify the level of employment and production. Friedman in (1968) affirms that the attempt to maintain artificially low interest and employment rates was destined to fail as a result of excessive monetary expansion. While Keynesians argues that aggregate demand can be stimulated by monetary and fiscal policy. Therefore, when output is below its potential level, thus the country does not produce enough according its capacity, the Central Bank may issue liquidity in the market, enabling the increase of securities price. In this paper we will try to study the impact of monetary policy on the country economic growth, starting from: the impact of increased demand in relation to prices, assessment of prices reaction based on monetary supply and the impact of monetary policy on the promotion of investment.
Keywords monetary policy, economic growth, inflation, investments, public debt
JEL classification E52, E58