The thesis is divided into three essays that examine the role of money, interest rates, and credit in Pakistan, an emerging and lower middle-income country. The Structural Vector Autoregressive (SVAR) paradigm is used to investigate the dynamic effects of monetary policy (MP) shocks on an economy. The novelty of our approach, however, is in the thorough investigation of contemporaneous causal relationships among variables, utilizing Directed Acyclic Graphs (DAG) to identify the SVAR model. The first essay examines the effectiveness of various monetary transmission mechanisms (MTMs), such as the interest rate channel, money channel, exchange rate channel, credit channel, using monthly data from January 1996 to June 2018. The second essay investigates the impact of MP on various components of aggregate demand (AD), including private investment (PI), private consumption (PC), and government consumption expenditure (GC). Furthermore, the study uses yearly data from 1976 to 2019 to assess the impact of different components of AD on each other and other macroeconomic variables. The final essay investigates two key issues, i.e., the finance-growth nexus and the disaggregated analysis of credit. We are primarily concerned with the impact of excessive government borrowing from commercial banks on private-sector credit by using monthly data from June 2006 to June 2018. The study observes that rising oil prices cause inflationary pressures in Pakistan, and the interest rate channel effectively controls inflation. Furthermore, the study concludes that a positive interest rate shock reduces PI and GC significantly. However, it has no effect on PC. A positive money supply shock, on the other hand, significantly increases PC, PI, and GC. Moreover, the study notes that the PI shock has no significant impact on any other AD component, but it aids in the reduction of inflationary pressure. The Positive PC shock, on the other hand, causes a significant increase in PI while having no effect on inflation. Additionally, the study finds no significant evidence that GC crowds out PI. However, we observe that excessive public sector borrowing significantly crowds out bank credit to the private sector. Moreover, our research supports the idea that financial development is driven by economic growth. Supervisor:- Dr. Asad Zaman Co-Supervisor:-Dr. Abdul Jalil