Money demand and financial liberalization in Indonesia

James, Gregory A.

doi:10.1016/j.asieco.2005.08.003

Cited by 37 publications

(43 citation statements)

References 31 publications

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“…Although Johansen-Juselius (1990) is the common method used in the literature to identify the long-run relationship between the variables, the method is not suitable for a country that undergoes financial liberalisation. Under financial liberalisation, standard cointegration test violates the assumption of time-invariant in the cointegration vector and thus the ADRL approach that offers asymptotic critical value bounds for Wald test is appropriate (James, 2005). Majid (2008) put forward the use of the bounds test for ample reasons.…”

Section: Methodology and Data Descriptionmentioning

confidence: 99%

The Impact of Divisia Money on Monetary Model of Exchange Rate in Indonesia

Leong¹,

Puah²,

Liew³

2018

Economics &Amp; Sociology

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Stability of the exchange rate is critical for policy formulation in Indonesia and thus, has boosted the study of exchange rate behaviour. In this study, the monetary model of exchange rate has been utilised to determine the exchange rate for Indonesia. The model was improved by means of including the Divisia monetary aggregate as the money measure instead of conventional money supply. The ARDL approach, which was valid in spite of the variables' stationary properties, was used for the estimation. The findings indicated that monetary fundamentals are significant in explaining the exchange rate movements in Indonesia when Divisia money was incorporated into the monetary model of the exchange rate. As a result, monetary fundamentals can serve as the determinants of exchange rate in addition to non-monetary fundamentals in the case of Indonesia. High magnitude of the money supply differential and the real income differential coefficients also implied that monetary targeting can serve as a useful instrument for monetary policy in addition to inflation targeting. The research is based on the data ranging from 1984Q1 to 2017Q1.

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Section: Methodology and Data Descriptionmentioning

confidence: 99%

The Impact of Divisia Money on Monetary Model of Exchange Rate in Indonesia

Leong¹,

Puah²,

Liew³

2018

Economics &Amp; Sociology

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“…Someone's job determines the level of financial literacy. For example, working in a company with a good position tends to have good financial literacy, in which, it will utilize financial products and services in managing its finances (James, 2005).…”

Section: Introductionmentioning

confidence: 99%

The effect of financial literacy towards financial inclusion through financial training

Bire

Sauw

María

2019

ijssh

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The current study aimed to describe the influence of financial literacy on financial inclusion that mediated by financial training. It focused on Micro, Small, and Medium Enterprises (MSMEs). Respondents in the study were 54 respondents that were taken from 119 MSMEs in Kupang city, Indonesia. The analysis applied path analysis technique. It was to determine the direct or indirect relationship with SPSS Version 20. Analysis results have shown that financial literacy has got a direct and significant impact on financial inclusion. Its contribution to financial training is 33%. In the other side, the contribution of financial literacy towards inclusion is 32%. Furthermore, financial training has mediated the relationship between financial literacy and financial inclusion. The presentation is 11%. This phenomenon shows that in the future, it is necessary to increase the frequency of financial training for MSMEs actors in Kupang city, Indonesia. The training has to be conducted to increase financial inclusion in understanding the knowledge of the financial product. Since the current study only examined financial literacy, financial inclusion, and financial training, it is suggested that the future researches may examine other aspects such as transparency, accountability, and quality of financial statements.

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“…However using CUSUM SQUARES stability tests, the money demand functions for India, Malaysia and Pakistan showed some instability. Price and Insukindro (1994) Other studies on money demand for Indonesia are Dekle and Pradhan (1997), McNelis (1998), James (2005) and Narayan (2007). The recent studies by James (2005) and Narayan (2007) argue that financial liberalization plays a key role in determining money demand and its fluctuations in Indonesia.…”

Section: Countriesmentioning

confidence: 99%

“…Price and Insukindro (1994) Other studies on money demand for Indonesia are Dekle and Pradhan (1997), McNelis (1998), James (2005) and Narayan (2007). The recent studies by James (2005) and Narayan (2007) argue that financial liberalization plays a key role in determining money demand and its fluctuations in Indonesia. Dekle and Pradhan (1997) We use the standard Keynesian specification of demand for money in which demand for real narrow money is a function of real income and the nominal rate of interest.…”

Section: Countriesmentioning

confidence: 99%

Application Of The Alternative Techniques To Estimate Demand For Money In Developing Countries

Singh¹,

Kumar²

2012

jda

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In this paper, we applied alternative time series techniques and obtained similar summaries of demand for money relations for twelve developing countries. This indicates that adequate attention should be paid to the purpose of research and interpretation of results rather than to econometric techniques. We also find that income elasticities are close to unity for almost all of our sample countries and the interest rate elasticities are well determined and significant. Further, it is shown that demand for money in these countries is temporally stable and therefore the respective monetary authorities may target money supply as opposed to the rate of interest.

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Money demand and financial liberalization in Indonesia

Cited by 37 publications

References 31 publications

The Impact of Divisia Money on Monetary Model of Exchange Rate in Indonesia

The Impact of Divisia Money on Monetary Model of Exchange Rate in Indonesia

The effect of financial literacy towards financial inclusion through financial training

Application Of The Alternative Techniques To Estimate Demand For Money In Developing Countries

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