Indian Journal of Fundamental and Applied Life Sciences ISSN: 2231– 6345 (Online) An Open Access, Online International Journal Available at www.cibtech.org/sp.ed/jls/2015/03/jls.htm 2015 Vol. 5 (S3), pp. 1513-1520/Aleemran and Yazdani Research Article © Copyright 2014 | Centre for Info Bio Technology (CIBTech) 1513 THE IMPACT OF MONETARY VERIABLES ON ECONOMIC GROWTH IN SELECTED ISLAMIC COUNTRIES *Roya Aleemran 1 and Faramarz Yazdani 2 1 Department of Economics, Tabriz branch, Islamic Azad University Tabriz, Iran, Tabriz, Iran 2 Department of Economics, Marand branch, Islamic Azad University Marand, Iran, Marand, Iran *Author for Correspondence ABSTRACT Achieving a high level of development and economic growth (GDP) has been one of the main objectives of economic planners and policymakers for every country; and tools, variables and policies that can help to achieve this important issue attract a special attention. In this situation, a policy that can be effective in creating GDP growth is to apply appropriate monetary policy for the country. It will be more effective when the effectiveness of each monetary policy tools and variables on the rate of GDP growth is clear and specific. Current study aims to determine the effectiveness of monetary policy variables on the growth of GDP in selected countries (Iran, Turkey and Malaysia) and it examined the influence of the exchange rate, inflation rate, liquidity variables and credit facilities as independent variables on the GDP growth as the dependent variable. The results of the study indicate that each change in selective variables can effect the GDP growth in Iran, Malaysia and Turkey where some of them affect directly and others indirectly. Keywords: GDP, Inflation, Exchange Rate, Liquidity, Utilities, Islamic Countries INTRODUCTION Economic growth attracts a special attention of countries and economic planners and is particularly important in developing countries. In these circumstances and in this group of countries, the variables that can affect economic growth are considered and examined in order to do better planning to achieve higher economic growth determining the extent and how they relate to economic development. In this regard, the governments are pursuing to apply policies in order to achieve a high level of economic growth. Monetary policy is always considered as one of the macroeconomic policies. In such circumstances, the study of impact of monetary policy on economic growth can lead to extremely rewarding planning, goal setting and macro policy. Literature The Definition of Economic Growth and Development Economic growth of a country includes real per capital national output for the country in a given period. Definition of development is more difficult than growth. Literally, development means improvement. In fact, development is multi-dimensional and is a concept far beyond more production. Development should be seen as a multidimensional process that requires fundamental changes in specific issues, public attitudes and national institutions; and it accelerates economic growth and reduces inequalities. Thus, the transformation and fundamental changes in social, cultural and political structures of the country leads to development dominant on economic growth. Thus, it can be expected that economic development is in parallel with economic growth (with a time delay), but economic growth may not necessarily mean development. In 1367, Nili conducted a study on the effect of increasing money on economic system of Iran based on statistical data for 1338-1362. He made a model for studying the effect of government spending on liquidity, changes of liquidity on the price level and total investment. In 1370, a research was designed for studying the appropriate monetary policy to stabilize economic activity in Iran by a group of Iranian researchers under the supervision of Dr. Komijani. He studied the mechanism of the influence of money in Iran economy in 9 monetary econometric models based on statistical data from 1353 to 1369. The results of mentioned research that is more comprehensive than other studies indicate that changes in the money stock in the years after the Revolution are affected by the government budget deficit and the credit