Determining Factor for Malaysian Money Demand Function

Mazher, Muhammad Ahmad; Dahlan, Jauhari

doi:10.29040/ijebar.v4i03.1091

Cited by 5 publications

(6 citation statements)

References 13 publications

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“…This is also confirmed by Aditia and Cahyono (2018); Shafiq and Malik (2018) and Taiwo (2012). However, in the long run, GDP tends to have a positive effect on money demand, which is supported by Arintoko (2011) and Mazher and Dahlan (2018).…”

Section: Discussionmentioning

confidence: 88%

The Flow of Money Demand in Indonesia: What Drives it?

Wijaya¹,

Nurjanana²,

A³

2022

5009

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Indonesia’s economy is experiencing a contemporary phase marked by decades of financial turmoil. Fluctuations in money demand are inseparable from the responsibilities of Bank Indonesia, which is the holder of rules and regulations and has full control of tracking the effects of financial flows. In reality, the imbalance between the demand for money and the supply of money with limited stock and capacity has an impact on macroeconomic turmoil. The orientation of this study follows up on the causality between gross domestic product (GDP), deposit interest rates and the rupiah exchange rate against the demand for money in Indonesia. The quantitative research approach supports the objective. Time series data from 2006–2020 was obtained from the Central Statistics Agency of Indonesia and Bank Indonesia. The data was analyzed using the error correction model (ECM) through EViews 9.0. The indications are that in the short and long terms, GDP and the rupiah exchange rate have a positive effect and increase the demand for money. An increase in deposit rates has a negative effect on the demand for money. Holistic recommendations concentrate on parallel and collaborative monetary instruments between executive parties, including banking. Also, it is necessary to control and visualize policies that are more comprehensive and consider holistic issues related to the aggressiveness of money circulation, which has the potential to disrupt the macroeconomy.

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Section: Discussionmentioning

confidence: 88%

The Flow of Money Demand in Indonesia: What Drives it?

Wijaya¹,

Nurjanana²,

A³

2022

5009

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“…The finding suggested that the real GDP and exchange rate had a positive and negative relationship with the money demand in Pakistan respectively. Financial innovation and the total population led to more demand for money as the demand for more money for business also increases as the size of the population increases [9]. Similar study by Adnan, Asad, and Kalim [10] to determine the money demand function in Pakistan with the help of the monetary policy.…”

Section: Literature Reviewmentioning

confidence: 82%

“…Muhammad and Muhammad [9] investigated the relationship between the demand for real money and its determinants such as, the actual GDP, deposit rates, exchange rates, fiscal reforms and the total population. In the study, the ARDL approaches was used in the experimental analysis.…”

Section: Literature Reviewmentioning

confidence: 99%

A Comprehensive Investigation into the Money Demand Function in Cambodia: An Empirical Analysis

Song,

Lim

2023

AJEBA

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The objective of this study is to establish a money demand function in Cambodia. The findings obtained through the ARDL approach to cointegration indicate that real income, consumer price index, and interest rate are cointegrated with real money demand. In terms of the estimated results derived from the long-run model, it is observed that real income has a statistically significant positive impact on real money demand, while the general price level and interest rate have a negative impact. The short-run dynamic model, known as the error correction model, demonstrates that all explanatory variables collectively account for the growth rate of real money balances. In the short-run, the growth rate of real income exhibits a positive relationship with the demand for real money, whereas the inflation rate and changes in interest rate have a significant negative effect on the demand for real money balances. The estimated slope coefficient of the short-run dynamic model, which measures the speed of adjustment, is projected to be 60.67%. This outcome suggests that the real money balance model takes no more than two quarters to adjust towards long-run equilibrium in response to short-run dynamic shocks. Stability tests, such as the CUSUM and CUSUMSQ tests, indicate that the real money demand function in Cambodia remains stable in the long-term. The findings derived from this study provide empirical evidence in favor of the quantity theory of money.

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“…Narrow money consists of currency outsite bank and savings that can be taken at anytime. The money supply used is broad money or can be interpreted as money in circulation in broad definition (Mazher & Dahlan, 2020). The broad money supply is total of narrow amount of money plus time deposits.…”

Section: Methodsmentioning

confidence: 99%

The Influence of Monetary Policies on Manufacturing Output

Krisnawati

2023

jef

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The aim of this study is to examine the effect of monetary policies on manufacturing outputs in Indonesia. This research uses a quantitative method with the Engle-Granger Error Correction Model (E-G ECM) analysis. This study applies monetary policies variables which consist of broad money, foreign exchange reserves, inflation, and Bank Indonesia interest rates on the outputs of the manufacturing sector reflected in the value of the gross domestic product of the manufacturing sector. The data are time-series data from 2010 Q1 to 2021 Q4. The results show that in the short run, inflation significantly influences manufacturing outputs. Meanwhile, broad money, foreign exchange reserves, and interest rates do not affect manufacturing outputs. In the long run, broad money, inflation, and the interest rate of Bank Indonesia significantly influence manufacturing outputs, while the foreign exchange reserve does not significantly affect manufacturing outputs. This study emphasizes the importance of broad money, inflation, and the interest rate to increase manufacturing outputs in Indonesia.

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Determining Factor for Malaysian Money Demand Function

Cited by 5 publications

References 13 publications

The Flow of Money Demand in Indonesia: What Drives it?

The Flow of Money Demand in Indonesia: What Drives it?

A Comprehensive Investigation into the Money Demand Function in Cambodia: An Empirical Analysis

The Influence of Monetary Policies on Manufacturing Output

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