Financial Liberalization and Divisia Money Demand in Indonesia

Sianturi, Ronald Hasudungan and Tanjung, Ahmad Feri and Leong, Choi-Meng and Puah, Chin Hong and Brahmana, Rayenda Khresna (2017) Financial Liberalization and Divisia Money Demand in Indonesia. Advanced Science Letters, 23 (4). pp. 3155-3158. ISSN 1936-6612

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Abstract

Money demand function that turns out to be unstable due to the financial liberalization has affected the effectiveness of monetary policy that utilizes monetary targeting as policy target. Thus, Divisia monetary aggregate that is consistent with the economic theory has been used to examine the money demand function in Indonesia. Monetization is also included as a determinant of money demand to measure the financial deepening. A stable M2 money demand has been identified via the use of Divisia M2 money and the inclusion of monetization variable. Monetary targeting can serve as alternative policy target for Indonesia and there is a possibility for a return to monetary targeting in Indonesia.

Item Type: E-Article
Uncontrolled Keywords: Divisia, Financial Liberalization, Monetization and Money Demand, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HG Finance
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 10 Aug 2017 07:13
Last Modified: 03 Oct 2017 02:20
URI: http://ir.unimas.my/id/eprint/17172

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