Measuring the Relative Importance of Fiscal and Monetary Policy in Stimulating Economic Growth in Yemen: An Econometrics Study Using Co-integration Approach

The study attempted to analyze and evaluate the performance of monetary and fiscal policy for the period 2000-2014 and its effectiveness in increasing economic growth using the descriptive analytical and econometrics approach. The study also attempted to measure the relative importance of fiscal and monetary policies and their relationship to economic growth using the co-integration method and the error correction model, which allows measuring the relative importance of fiscal and monetary policy and its relation to economic activity. Analysis of fiscal and monetary indicators showed that there were imbalances and distortions in financial and monetary performance that contributed to the weak effectiveness of fiscal and monetary policy in achieving economic stability and stimulating economic growth.