The long run relationship between inflation and economic growth has been recognized by macroeconomist in the last three decades. For developing countries inflation effect on economic growth is more supply side phenomena than demand side or economic fluctuation (Basu, 2000). On the other hand stable and low inflation rate in the long run will promote higher output growth. I found significance two way causality between inflation and growth in Indonesia. The result has shown a non linier causality relationship from inflation to economic growth using Indonesian annual data from 1981 to 2010. The data reveals there is long run non linier relationship between inflation and growth.

Collateral Effect to Bank Loan Probability for Microenterprises in West SumateraThis paper reveals that West Sumatera banking sector are more likely using the availability of collateral for the credit to micro, small and medium enterprises (MSME). Using 384 sample size from MSME in West Sumatera, if a MSME have enough collateral, the probability of their credit application to be rejected by banks will fall from 59.9% to 11.7% comparing to they don’t have enough collateral. This finding proved a credit guarantee scheme is needed, and for the further study it is recommended to conduct research on the characteristic of the potentials of MSME as a credit scoring model for banks.Keywords: Micro, Small and Medium Enterprises; Banking Credit; Logistic Model AbstrakPenelitian ini membuktikan bahwa perbankan di Sumatera Barat cenderung untuk menggunakan jaminan yang cukup sebagai dasar penolakan dan pemberian kredit yang diajukan Usaha Mikro Kecil dan Menengah (UMKM). Menggunakan data hasil survei dengan ukuran sampel sebanyak 384 UMKM di Sumatera Barat, penulis menemukan bahwa peluang sebuah aplikasi kredit yang diajukan UMKM ditolak akan berkurang dari 59,9% menjadi 11,7% jika UMKM tersebut memiliki jaminan yang cukup. Hasil penelitian ini merekomendasikan pentingnya sistem penjaminan kredit untuk UMKM dan sekaligus merekomendasikan untuk melakukan penelitian lanjutan untuk mengindentifikasi karakteristik UMKM yang memiliki potensi yang baik dan pembuatan model kredit scoring.

This study explores interconnections between risk behaviour in the financial sector, particularly banking sector, with monetary policy stance. Referring Bernanke and Blinder (1988) modified model for analyzing the bank credit behavior, we develop an empirical model to test the role of risk behaviour in monetary policy transmission mechanism. Vector Error Correction Model are applied to test the significance of interaction between risk variables and monetary policy stance in the short run dynamics of credit behavior around its long-run cointegration with real GDP. Some empirical results emerge from this preliminary study. First, there is early indication that risk taking channel in the monetary policy transmission mechanism exists in Indonesia during analysis period. Second, risk variables and credit tend to move procyclicalyl while monetary policy stance tends to a-cyclical. Third, pro-cyclical behavior of credit and risk variables reverses the effect of loose monetary policy stance, and there is an indication of asymmetric effect between tight monetary policy and loose monetary policy in Indonesian economy. These empirical findings bring about policy recommencations for better understanding on the risk behavior in the banking sector, as well as integration beetween monetary dan financial sector policies.JEL Code : E52, E58,Key word: Monetary Policy Transmission Mechanism, Monetary Policy Stance, Banking Risk Behavior, Risk Perception

This study explores interconnections between risk behaviour in the financial sector, particularly banking sector, with monetary policy stance. Referring Bernanke and Blinder (1988) modified model for analyzing the bank credit behavior, we develop an empirical model to test the role of risk behaviour in monetary policy transmission mechanism. Vector Error Correction Model are applied to test the significance of interaction between risk variables and monetary policy stance in the short run dynamics of credit behavior around its long-run cointegration with real GDP. Some empirical results emerge from this preliminary study. First, there is early indication that risk taking channel in the monetary policy transmission mechanism exists in Indonesia during analysis period. Second, risk variables and credit tend to move procyclicalyl while monetary policy stance tends to a-cyclical. Third, pro-cyclical behavior of credit and risk variables reverses the effect of loose monetary policy stance, and there is an indication of asymmetric effect between tight monetary policy and loose monetary policy in Indonesian economy. These empirical findings bring about policy recommencations for better understanding on the risk behavior in the banking sector, as well as integration beetween monetary dan financial sector policies.JEL Code : E52, E58,Keyword: Monetary Policy Transmission Mechanism, Monetary Policy Stance, Banking Risk Behavior, Risk Perception

Technological developments and financial innovations, especially in the payment system, have encouraged banks around the world to carry out a number of innovations that have resulted in a new paperless based financial system. The finding that the payment system innovation affects the circulation of money and the stability of the monetary condition of a country, makes this risk possible in Indonesia. By using the error correction model, this study can provide information on the short run dynamic relationship and the impact of payment system innovation represented by non cash payment instruments such as credit cards, debit cards, e-money and payment transaction settlement processes (national clearing system and real time gross settlement) on the velocity of money in Indonesia in the period 2016M1 to 2020M6. The results of the research findings state that the impact generated by the rapid velocity of payment system innovation on the velocity of money circulation is not temporary, this is evidenced by the effect of payment system innovation on the velocity of money circulation which continues over a long period of time.

After the global financial crisis in 2008, economists believe that global economic conditions are a source of instability for the domestic economy in developing countries such as Indonesia. These external factors include fluctuations in global financial markets, volatility in commodity prices and capital inflows into the domestic economy which are known to have an impact on the financial cycle. This study explores the interaction of the three external factors to determine which factor has the most dominant interaction with the financial cycle in Indonesia. The interaction between external factors and the Indonesian financial cycle also means understanding the factors that affect the contraction period and expansion of the financial cycle in Indonesia. The study used time series data. The data used are secondary data from official publications, namely Bank Indonesia for data on capital flows and bank credit, the International Monetary Fund (IMF) for international commodity price index data and the global financial market valatility index (VIX). The analysis period in this research is 1993 first quarter to 2018 fourth quarter. This data sample selection is based on the availability of the longest data series using the quarterly data frequency in Indonesia. The result shows that shows that the interaction of total capital inflow to Indonesia has a pro-cyclical movement pattern with commodity price cycles and has a counter-cyclical movement pattern with the global financial cycle. Furthermore, the credit cycle to non-business fields is the cycle with the strongest interaction with all capital flow cycles analyzed in this study. Meanwhile, the total credit cycle and the credit cycle to the business field show a stronger procyclical interaction with the equity-based capital flow cycle than the interaction with the debt-based capital flow cycle

This study aims to analyze; (1) the impact of the amount of rice production on the rice price in Padang Pariaman (2) the effect of dry threshed paddy (Gabah Kering Panen/GKP)  price on the rice price in Padang Pariaman (3) the effect of unhusked dry rice ready for milling (Gabah Kering Giling/GKP) price on the rice price in Padang Pariaman (4) the influence of the Pekanbaru rice price on the Padang Pariaman rice price. The data used is monthly  from 2018-2020. Analysis used analysis Ordinary Least Square (OLS). The results showed that (1) the amount of rice production had a negative and significant effect on the price of rice in Padang Pariaman (2) the price of GKP had a positive and significant impact  on the price of rice in Padang Pariaman (3) the price of GKG had a positive and significant effect on rice prices. significant effect on rice prices in Padang Pariaman (4) Pekanbaru rice prices have a positive and significant impact on Padang Pariaman rice prices

Tobacco consumption is a continuing social problem around the world. This is because tobacco is a silent killer that contributes to mortality and chronic disease. Even though the consumption of tobacco contributes to social and health problems, it also contributes to economic problems. This is due to smoking is always associated with poverty and one of factors contributed to poverty in developed or developing countries. This research is a literature review study that collects and compares various previous research results related to the impact of the increase in cigarette prices, which is a government policy in reducing cigarette consumption by increasing taxes and customs affecting household consumption of other expenditures such as education, healthcare, communication, fuel and food. In addition, it also identifies whether the costs of cigarette consumption are the same for low-income and high-income households. A review of the literature shows that that the increasing tobacco consumption by poor households will sacrifice their consumption for almost all types of expenditure such as food, education, health, entertainment, communication, and durable goods. The case will different for poor and higher income household. Higher income household will not have affected their consumption on other household expenses as much as poorer income household.