Abstract
The effect of money on economic growth has been a debate for centuries now. Even though many economists do agree on that effect, different analyses are assumed concerning the transmission mechanism. The main focus of this study is to empirically investigate the relationship between the money supply and GDP in the Kingdom of Saudi Arabia, Kuwait, and the United Arab Emirates during the period from 1992 until 2019. The data, studied in both nominal and real terms, revealed that the GDP in each country showed dependency on money supply only in real terms. However, the results differ according to the money aggregate from which the effect arises. Similar findings were derived from cointegration and Granger causality tests. The lack of consensus of a solid effect of money on income is inconsistent with the Monetarists’ view regarding the role of money in the economy.