The role of the monetary policy in the correlation between the banking sector and the economy.

Article examines the casual relationship between the effectiveness of monetary policy and financial inclusion in developed and underdeveloped countries. Structural Vector Auto-regression methods have been used to investigate the relationship between monetary policy effectiveness and financial inclusion. A causal relationship between financial inclusion and the effectiveness of monetary policy in developed countries. Thus, effective monetary policy increases financial inclusion in the country, and higher financial inclusion lowers inflation and makes monetary policy more effective. In less developed countries, a causal link can be observed from the effectiveness of monetary policy to financial inclusion. The use of the Structural Vector autoregressive technique and the three-dimensional financial inclusion index to examine the relationship between monetary policy effectiveness and financial inclusion in developed and developing countries is an important contribution to the study.