Analysis of the Interdependence of Monetary Instruments against Real Money Demand in Indonesia

Putri Suryani Sebayang, Fitrawaty, Muhammad Fitri Rahmadana

2018

Abstract

This research aims to determine how the relationship between variables gross domestic product, interest rates, exchange rates, and inflation against the demand for real money (M1) in Indonesia. The data used in the study of this empirical data for the time series of the year 1987-2017 derived from Bank Indonesia and the Central Bureau of Statistics (BPS). The analysis method in this research is The Vector Error Correction Model (VECM). The results showed there is a direct relationship between the exchange rates with demand for real money (M1). And there is a direct relationship with the demand for real money (M1) with inflation. The results of the study also showed the gross domestic product of influential negative and significantly affect the demand for real money in the short-term. Variable exchange rates, interest rates and inflation effect no effect against the demand for real money (M1) in the short-term. The demand for real money (M1) in Indonesia in the long-term be influenced in a positive and significant by the variable gross domestic product, exchange rates, interest rate. While the variable is a negative and significant effect of inflation against the demand for real money (M1) in Indonesia in the long-term.

Paper Citation

in Harvard Style

Sebayang P., Fitrawaty. and Rahmadana M. (2018). Analysis of the Interdependence of Monetary Instruments against Real Money Demand 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 532-537. DOI: 10.5220/0009505005320537

in Bibtex Style

@conference{unicees18,
author={Putri Suryani Sebayang and Fitrawaty and Muhammad Fitri Rahmadana},
title={Analysis of the Interdependence of Monetary Instruments against Real Money Demand in Indonesia},
booktitle={Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,},
year={2018},
pages={532-537},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009505005320537},
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 of the Interdependence of Monetary Instruments against Real Money Demand in Indonesia
SN - 978-989-758-432-9
AU - Sebayang P.
AU - Fitrawaty.
AU - Rahmadana M.
PY - 2018
SP - 532
EP - 537
DO - 10.5220/0009505005320537