Money Supply Variables Research Articles

Analysis of the Use of E-Money, Money Supply, and Gross Domestic Product on Interest Rate

This research aims to examine the effect of a direct relationship between the use of e-money and the circulation of money on interest rates, as well as an indirect effect, namely through the intervening variable gross domestic product. This research method uses a statistical model of path analysis. The sample used was secondary data fetched from the Website of Bank Indonesia (BI) and the Central Bureau of Statistics (BPS), since regulation on electronic payment method was officially issued by Bank Indonesia in May 2009-March 2023. The test results shows that e-money and money supply each, have a significant positive effect on gross domestic product variables. Gross domestic product variables had a negative effect on interest rates. E-money and money supply variables has a negative effect on interest rates, both directly or indirectly through the intervening variable of gross domestic product. Increasing e-money user and money supply, preponderant to gross domestic product, can decrease the interest rate. The results of this research are expected to provide benefits as a prediction of the Indonesian economy in the future, as a result of the issuance of electronic payment instruments. So for the regulators, they can set the right interest rate policy to be able to maintain stable economic conditions. Keywords: electronic money, money supply, gross domestic bruto, interest rate

Nonstationary Time Series Models Using ARDL and NARDL Estimation

The paper features an examination of the link between the behavior of the Money supply and Bank deposit in both an autoregressive distributed lag ARDL, plus a nonlinear autoregressive distributed lag NARDL framework. The regression relationship between any two nonstationary time series suffer from the problem of superior regression and the results may be incorrect and unreliable, and to overcome this problem the aim of this paper was find a balanced relationship in the long - run between the variables of Money supply and Bank deposits using the method of cointegration by focusing on the behavior of the residuals of the cointegration model based on monthly data for a time series for the period (2010-2015). The time series stationary test was done by conducting the Unit Root Test based on the Philips-Perron test to find out the stationary of the variables and then detect the existence of the cointegration using the bounds testing, the tests showed the nonstationary of the time series at level I(0) and their become stationary after taking the first differences I(1). Bounds test showed the existence of cointegration .The Error correction model for the ARDL model was the best, despite the convergence of most of the test results for the two models, but the ARDL model was the more accurate with the speed of adjustment in the short -run to return to long-run equilibrium, as it reached (37%) and a period of two months for the ARDL model, while the percentage for the NARDL model was equal to (28%) and a period of time of approximately three and a half months.

Money Supply, Inflation and Dollarization: An Analysis on Türkiye Using Fourier Models

This study examines the impact of inflation and money supply on dollarization. Especially in recent years, the rapid rise of the exchange rate and inflation in Türkiye has put the phenomenon of dollarization back on the agenda. The study covers the period 2012Q4-2023Q4. The study first applies the Fourier ADL cointegration test, which allows for soft breaks. As a result of the test, it was found that the variables have a long run relationship. In the short run, only budget revenue has a positive effect on dollarization. In the long run, the exchange rate, exports, money supply, and deposit rates have a positive effect, while inflation has a negative effect. The study also applied the Fourier-Toda-Yamamoto causality test. As a result of the test, bidirectional causality was found between exchange rate, inflation and money supply variables and dollarization. The striking result of the study is that inflation has a negative impact on dollarization. This result, which is consistent with some studies in the literature, is attributed to the money supply. Although the demand for foreign exchange increases because the money supply is higher than inflation, the dollarization index decreases. This explanation can explain the negative relationship.

Analysis of Macroeconomic Variables on the Existence of Inflation in Indonesia Using the Vector Error Correction Model Approach

This research investigates the impact of macroeconomic variables, namely money supply, exchange rate, interest rate, and the joint stock index, on inflation in Indonesia. Employing the Vector Error Correction Model (VECM) dynamic model approach, the study reveals a long-term relationship among each variable (Inflation Rate, Jakarta Composite Index, Interest Rate, Exchange Rate, and Money Supply). Granger Causality Test results indicate a unidirectional relationship of interest rate and money supply variables to inflation, interest rate to Jakarta Composite Index, and money supply to the exchange rate. Conversely, there is a bidirectional relationship between exchange rate and inflation variables. In the short term, Interest Rate significantly and positively influences inflation, whereas, in the long term, it exhibits a negative and insignificant effect. Money supply, in the long run, significantly and positively affects the inflation rate. This study stands out in the macroeconomic literature due to its distinctive choice of variables and the dynamic model employed

The relationship between money supply and inflation: analysis with PANELVAR approach

The relationship between money supply and inflation: analysis with PANELVAR approach

The Role of Sharia and Conventional Banking in Public Welfare in North Sumatra

Financial institutions have a very important role in a country’s economy which allows millions of funds (surplus units) to be collected and transferred to various other segments of society (deficit units) which can be used as investment capital. The role of credit or financing in investment and increasing income/welfare, and based on the experience of the economic crisis and global financial crisis which were also caused by banking credit. This article aims to review the ability of conventional banking and Sharia banking to provide long-term prosperity in North Sumatra by looking at inflation, exchange rates, money supply, Sharia banking financing, and current account loans, toward North Sumatra’s Gross Regional Domestic Product and the period when it reaches balance. Mixed methods research combines quantitative methods and qualitative methods to be used together in this research. The research population is all data published in the central OJK and BPS (North Sumatra Province Central Statistics Agency), and the sample taken is data that includes all variables during the 2015-2020 period. Analysis of the VAR (Vactor Autoregression) model as an alternative model to multiple equations to minimize the theoretical approach and make economic phenomena better. The result is that there are several negative influence measurement results on the inflation variable and current account loan credit. Meanwhile, the variables of money supply, exchange rate, sharia banking financing have a positive and significant positive influence on North Sumatra’s GRDP. So, the banking VECM test has a role in increasing North Sumatra’s GRDP in both the short and long term

Analisis Inflasi di Indonesia: Penerapan Model Vitaliano

This study aims to analyze the case of inflation in Indonesia, which is based on the problem of raising the price level (inflation) which is a classic economic problem of various countries, especially developing countries such as Indonesia. In this study using the Vitaliano model to analyze inflation, the variables included in this model are the money supply (M2), economic growth as measured by gross domestic product and government spending. The analytical tool used in this study is the Error Correction Model, with the test results concluding that the variables of money supply, economic growth and government spending have no effect on inflation in either the short or long run.

Policy Determinants of Budget Deficit in Indonesia

In this study, the causes of the budget deficit in Indonesia were examined using multiple regression analysis and the Error Correction Model (ECM) technique utilizing annual data for the years 1998 to 2020. The results show that in the short term, only inflation and government subsidies have a significant impact on the budget deficit in Indonesia when using the Error Correction Model (ECM) approach to analyze the effects of the chosen money supply variables, foreign exchange rates, inflation, and government subsidies.. Long-term estimations indicate that the government subsidies, inflation, foreign exchange rates, and money supply variables all have a positive and considerable impact on the budget deficit. Within 7 months, the equilibrium between the short- and long-terms can be restored. Policymakers are advised to keep an eye on changes in the money supply, foreign exchange rates, inflation, and government subsidies to avoid causing the budget deficit to rise above the allowable limits, which are 3 percent of the State Revenue and Expenditure Budget.

COMMERCIAL LOAN INTEREST RATE DETERMINANTS

This study aims to analyze which variables affect the commercial loan interest rates that banks use to their customers. The dependent variable used in the study is the commercial loan interest rate, and the independent variables are the inflation rate, deposit interest, dollar rate, and money supply. The data is compiled in CBRT evds sources and the time interval is monthly data between 01/2010-04/2021. The method of the study is the Ardl boundary Test and error correction model used in time series analysis. Within the framework of these models, problems such as trend effect and stasis of series that are frequently encountered in time series analysis were examined. According to the results obtained from the study, the effect of the deposit interest argument on the commercial loan interest rate in the short and long term was greater than that of other variables. It was concluded that inflation, exchange rate and M2 money supply variables had no effect in the long term.The effect of M2 money supply and exchange rate variables on short-term commercial loan interest is significant. It can be said that the effect of the three-period lag value of the exchange rate variable in the short term is also significant.

INFLATION FLUCTUATIONS AND ECONOMIC TURBOS IN INDONESIA

This study aims to determine whether the money supply, investment, consumption, and economic growth variables have a significant effect on inflation. To find out whether the variables of government expenditure, unemployment, and inflation have a significant effect on economic growth. The data analysis model in this study is simultaneous regression. The data analysis technique used is the quantitative method. Data were processed from the Central Bureau of Statistics from 2007 to 2021. The results of this study indicate that based on the estimation results, the t-count value is obtained, the money supply variable has a significant effect on inflation. The investment variable has no significant effect on inflation. The consumption variable has no significant effect on inflation. The economic growth variable has no significant effect on inflation. The government expenditure variable has a significant effect on economic growth. The unemployment variable has a significant effect on economic growth. The inflation variable has a significant effect on economic growth. In order to reduce the inflation rate to a low level, Bank Indonesia should use monetary policy to reduce the money supply.

ANALISIS DETERMINAN PENGARUH MAKROEKONOMI TERHADAP RETURN SAHAM BANK BUKU 4 DI BURSA EFEK INDONESIA

This study aims to analyze the macroeconomics of Bank BUKU 4 returns. This study uses the Vector Error Correction Model (VECM) using monthly return data for Bank BUKU 4 shares as the assessment variable and monthly inflation data, BI 7-day reverse repo interest rate. exchange rates, exchange rates, money supply, gross domestic product, foreign exchange reserves, and fed funds interest rates, as independent, with a data time span from January 2016 to December 2020. The results show that in short-term inflation, GDP, and variable reserves foreign exchange varies. , and the fed funds rate does not affect stocks. The BI 7 day reverse repo rate and money supply variables have a significant positive effect, and the exchange rate has a significant negative effect on BUKU 4 bank stock returns. In long-term inflation, the BI 7 day reverse repo rate, money supply, GDP, foreign exchange reserves, and The Fed funds rate does not affect stock returns. While the exchange rate has a significant negative effect on stock returns of BUKU 4 banks.

The Influence Money Supply, Inflation and Transaction Volume on Consumer Goods Index

Investments in the capital market have a high level of risk but also provide high profits, so it is very important to know changes in macroeconomic variables and investor behavior. In this study will examine the effect of the money supply, inflation volume, and transactions on the Consumer Goods Index.The partial test results show that the money supply and transaction volume have a significant positive effect on the consumer goods index, but inflation has no significant effect on the consumer goods index.Simultaneous testing shows that all variables have a significant influence on a good consumer index. The results show that all variables of money supply, inflation and transaction volume can explain 74.90%, and 25.10% are explained by other factors outside the research variable.

Modeling the relation among output-gap, inflation and money supply: comparison of FIVAR and VARFI model

Purpose- It is aimed to reveal the interaction of the output-gap,inflation and money supply variables within 1987: Q2 and 2020:Q2 periods for Turkey. Methodology- The model structure between variables are determined in the scope of FIVAR and VARFI models by using the Exact Maximum Likelihood (EML), Maximum Likelihood, and Whittle estimators. Findings- Monetary and fiscal policies should be used effectively and in a coordinated manner to take under control in devastating effect of inflation on economies and ensuring stability in prices and economy are among the targets of macroeconomic policies. Central Banks uses money supply and interest rates to be effective on income, employment and prices in the economy during the crisis periods. Since changes in money supply affect investments through interest rates, they have an impact on the output-gap and sustainability. Conclusion- Although the VARFI and FIVAR models seems to be similar,there are differences in the results. While one of these models leads to series with different integration orders, the other one leads to series with the same order of integration and a relation such as cointegration. Considering the modeling structure between variables, it is determined that the best performance occurs in structures where long memory structure continuity is modeled. When the rates of return to average are examined, it is concluded that the returns to the average determined at an exponential rate is due to the improved performance of long memory models.

DAMPAK KEBIJAKAN FISKAL DAN MONETER DALAM PEREKONOMIAN INDONESIA

The trade-off between achieving price stability and economic growth, especially in the short term is the impact of a decision-making dilemma for the conduct of fiscal policy or monetary policy in the Indonesian economy. The problem is what lies behind this study and aimed to determine the impact of fiscal and monetary policies on the Indonesian economy. The data used are secondary data sourced from Bank Indonesia and BPS variables namely GDP, Government Expenditure, Tax Revenue, Export, Exchange Rate, Money Supply, Interest Rates for time series from 2000 to 2012. Data analysis was performed using Two Stage Least Squares (TSLS) estimation with multiple linear regression models using Eviews 5.0 program assistance. The results of this study it can be concluded that the simultaneous equation model on IS to variable Interest Rate and a significant negative effect on GDP of Indonesia, while the Government Expenditure variable (G0), Export (X0) and Tax Revenue (Tx) and Exchange Rate (ER) effect positively and significantly to Indonesia's GDP, while the equation for the LM model of the Money Supply variables significantly and negatively related to Indonesia's GDP increased at a rate statistically a = 10% and for variable interest rate is not significantly to Indonesia's GDP.

The Impact of Macroeconomic Indicator on Islamic Insurance Demand in Indonesia

This research aimed to determine the development of Islamic insurance industry in Indonesia and analyze the influence of macroeconomic indicators Islamic insurance demand in Indonesia. Ordinary Least Square (OLS) was used in this research with monthly time series data from January 2014 to December 2016. The results of this research indicated that the variables of money supply, interest rate, GDP per capita, and education had a positive (significant) effect to the Islamic insurance demand in Indonesia. Moreover, the inflation variable and dependency ratio had a negative (significant) effect to the Islamic insurance demand in Indonesia.

Equity market and money supply spillovers and economic growth in BRICS economies: A global vector autoregressive approach

Previous studies report that private credit as a proxy of financial development contributes to economic growth in BRICS economies. This paper employs three additional measures of financial development, namely equity market, money supply and market capitalization, and further investigates cross-country evidence on the impact of equity market and money supply spillovers on economic growth in BRICS economies. Utilizing a Global VectorAutoregressive (GVAR) framework and quarterly data from 1989Q1 and to 2012Q4 from BRICS economies, we find that equity market and money supply variables do not predict the contributions of financial development in each BRICS member in boosting economic growth in the other member countries. However, market capitalization significantly influences economic growth. These results suggest that, besides private credit, market capitalization is another key channel of promoting growth in individual economies and the region. Policy implications of the findings are discussed.

Indikator Makroekonomi dan Pengaruhnya Terhadap Indeks Saham Syariah di Indonesia

This study aimed to analyze the influence of variables of money supply (M2), constumer price index (CPI), exchange rate (ER), BI Rate (BIRATE), Sertifikat Bank Indonesia Syariah (SBIS) with Shari'ah Indonesia Stock Index (ISSI). To see that effect will be made by the tests in stages Vector Autoregression. The data used in this research is secondary data during the period January 2012 until December 2016. The finding in long run shows that ISSI is positively significantly affected by CPI and it is negatively significantly affected by M2, ER and BIRATE. Granger-Causality test resulth shows that there are causality between CPI with BIRATE and CPI with SBIS, but there are three undirectional relationship which includes ISSI to ER, M2 to BIRATE and SBIS to BIRATE. DOI: 10.15408/ess.v8i2.7219

Understanding the Recent Growth in Consumer Loans and Credit Cards in Emerging Markets: Evidence from Turkey

ABSTRACTIn recent years, the surge in household indebtedness to historical heights has become a significant concern for developed economies. A similar trend has been witnessed in emerging market countries including Turkey. Our objective is to help further understand the dynamics of the recent growth in consumer loans and credit cards (CLCC) in Turkey. For this purpose, we investigate the long-term equilibrating relationships and short-term deviations from the equilibrium, and explore the determinants, directions, and strengths of causality relationships between CLCC and the selected macroeconomic variables, and analyze the dynamic interactions among the variables in the post-sample period by analyzing how CLCC responds to the shocks given to other macroeconomic variables and the contribution of each variable on the forecast variability of CLCC. We use monthly data for the period of January 2004—December 2013 of seven macroeconomic variables of money supply, interest rate, income, consumer confidence, inflation, stock market, and consumer goods imports. On empirical findings, we make suggestions about which policy tools should be used to influence, and if necessary to manage, the growth in CLCC.

The Effect of Money Supply on the Volatility of Korean Stock Market

We examined the potential relationships between changes in the money supplies of Korea and the United States and volatility of the Korean stock market using the GARCH, GJR-GARCH, and EGARCH models. We did not identify any such relationships, implying that changes in money supply do not influence the flow of information to the market. However, we found that the asymmetric effect of bad news on volatility was higher when contemporaneous changes in Korean and US money supply variables were included in the models. This indicates that changes in money supply did not affect Korean stock volatility directly. Finally, the results based on a variance model indicated that the money supply of the two countries had no effect on the Korean stock market. This formal study suggests that there is no significant forecasting power of past changes in money supply. Although stock returns and volatility are not directly affected by changes in the money supply, the influence of supply on macroeconomic activity should not be disregarded.

The Effect of Macroeconomic Variables on Stock Prices in Emerging Sri Lankan Stock Market

This study investigates the effects of macroeconomic variables on stock prices in emerging Sri Lankan stock market using monthly data for the period from September 1991 to December 2002. The multivariate regression was run using eight macroeconomic variables for each individual stock. The null hypothesis which states that money supply, exchange rate, inflation rate and interest rate variables collectively do not accord any impact on equity prices is rejected at 0.05 level of significance in all stocks. The results indicate that most of the companies report a higher R2 which justifies higher explanatory power of macroeconomic variables in explaining stock prices. Consistent with similar results of the developed as well as emerging market studies, inflation rate and exchange rate react mainly negatively to stock prices in the Colombo Stock Exchange (CSE). The negative effect of Treasury bill rate implies that whenever the interest rate on Treasury securities rise, investors tend to switch out of stocks causing stock prices to fall. However, lagged money supply variables do not appear to have a strong prediction of movements of stock prices while stocks do not provide effective hedge against inflation specially in Manufacturing, Trading and Diversified sectors in the CSE. These findings hold practical implications for policy makers, stock market regulators, investors and stock market analysts. DOI: 10.4038/suslj.v6i1.1689 Sabaragamuwa University Journal, vol 6, no. 1, pp 50-67