Analysis the Effect of Dual Monetary Policy Instrument on Index Industrial Productial in Indonesia

Mutiara Shifa, Dede Ruslan, Fitrawaty

2018

Abstract

This study aimed to analyse instrument of monetary policy in affecting economic growth in Indonesia that measure using Industrial Production Index (IPI). Since Indonesia has a dual finance system and this research is meant to compare the effectiveness both system as a instrument of monetary policy through interest rate channel, this research will be written in two models as in conventional model and sharia model. Using VAR research and conducted by Impulse Response Function (IRF) and Forecast Error Variance Decomposition Test. The IRF Test showed that on the conventional model, the responses of IPI to the shock of SBI and PUAB is positive and permanent, so do the response of IPI to the shock of SBIS and PUAS is positive and permanent. Fluctuation on the mechanism of sharia monetary policy subside faster than the conventional monetary. And for the result of FEVD test, conventional model give a positive contribution in the sense of raising economic growth, where in this research is measured by IPI, amounted to 37,51%, while the sharia model give a positive contribution to IPI, amounted 7.14%.Therefore, we can conclude that in Indonesia, mechanism of monetary transmission through interest rate channel using conventional model can be said better than sharia model in the term of raising economic growth.

Paper Citation

in Harvard Style

Shifa M., Ruslan D. and Fitrawaty. (2018). Analysis the Effect of Dual Monetary Policy Instrument on Index Industrial Productial in Indonesia.In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES, ISBN 978-989-758-432-9, pages 398-406. DOI: 10.5220/0009494203980406

in Bibtex Style

@conference{unicees18,
author={Mutiara Shifa and Dede Ruslan and Fitrawaty},
title={Analysis the Effect of Dual Monetary Policy Instrument on Index Industrial Productial in Indonesia},
booktitle={Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,},
year={2018},
pages={398-406},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009494203980406},
isbn={978-989-758-432-9},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,
TI - Analysis the Effect of Dual Monetary Policy Instrument on Index Industrial Productial in Indonesia
SN - 978-989-758-432-9
AU - Shifa M.
AU - Ruslan D.
AU - Fitrawaty.
PY - 2018
SP - 398
EP - 406
DO - 10.5220/0009494203980406