Singapore’s Economy and The Role of Macroeconomic Policies on Economic Growth
As a small open economy, Singapore has frequently been exposed to the external shocks; and therefore flexible and effective policies were required to not only stabilize the economy but also aid in the country's economic growth. This paper draws upon related literature about macroeconomic policies and their role in the growth of the economy and aims to reflect the relationship between economic growth relative to macroeconomic policies implemented by the authorities of Singapore adopting ordinary least square (OLS) method and also uses annual time series data obtained from World Bank during 1991 to 2009. The result suggests that both monetary and fiscal policy have significant effect on economic growth. The coefficient of fiscal policy is positive while monetary policy is negative which indicates that fiscal policy has more concerned with economic growth than monetary policy in case of Singapore. However, the combinations of both fiscal and monetary policies are highly recommended.
Index Terms - Economic Growth, Monetary Policy, Fiscal Policy.