EFFECTS OF INCREASED MONEY SUPPLY ON THE ECONOMIC STABILITY OF SOUTHEAST ASIAN COUNTRIES POST-BRETTON WOODS SYSTEM
List of Authors
  • , AINUL MOHSEIN ABDUL MOHSIN, FAUZIAH MD. TAIB, FAUZIAH MD. TAIB , SANI SAIDU ALHAJJ, SANI SAIDU ALHAJJ

Keyword
  • Interest rate manipulation, fractional reserve, credit creation, real GDP

Abstract
  • The aim of this research is to investigate the consequences of increased money circulation on the economic stability of Southeast Asian countries post-Bretton Woods system. Quantitative data collection was obtained from the World Development Indicator (WDI) reports from 1973 to 2018. Five ASEAN countries were selected using a purposive sampling technique. The collected data was then analyzed using descriptive, correlation and regression analyses using the Minitab 16 software. The analyzed data showed that an oversupply of money had caused a detrimental effect on the economic well-being of the five countries through inflation and recession. The study also found that a country’s monetary policy had direct consequences on real Gross Domestic Product (GDP), price stability and overall economic wellbeing of a given country. The study recommends that money supply should be managed prudently so as to curtail inflation, especially in terms of credit creation by private banks, because it will trigger an unfavourable effect on economic stability and the overall wellbeing of individual households in the country.

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