The Role of Advertising Expenditure in Measuring Indonesia’s Money Demand Function

Hiew, Lee-Chea and Puah, Chin-Hong and Muzafar Shah, Habibullah (2013) The Role of Advertising Expenditure in Measuring Indonesia’s Money Demand Function. Forthcoming in : The Journal of American Academy of Business, Cambridge.

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Abstract

Using the consumer theory approach as suggested by Habibullah (2009), this study aims to shed new light on monetary authority by incorporating advertising expenditure, a variable that has been neglected in the past, into study of the money demand function in Indonesia. In addition, different measurements of monetary aggregates (simple-sum and Divisia money) have been used in the estimation to provide better insight into the selection of a suitable monetary policy variable for the case of Indonesia. Empirical findings from the error-correction model (ECM) indicate that the advertising expenditure variable has a significant impact on the demand for money. Furthermore, as compared to simple-sum money, the model that used Divisia monetary aggregates rendered more plausible estimation results in the estimation of money demand function.

Item Type: Article
Additional Information: Universiti Malaysia Sarawak, UNIMAS
Subjects: A General Works > AC Collections. Series. Collected works
A General Works > AC Collections. Series. Collected works
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 30 Apr 2014 03:41
Last Modified: 14 Apr 2016 06:58
URI: http://ir.unimas.my/id/eprint/2147

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