Stability of Money Supply, E-money, Interest Rate, and Inflation in Indonesia

Mahatir, Moh. Ridha; Aimon, Hasdi; Sentosa, Sri Ulfa

doi:10.2991/aebmr.k.201126.012

Cited by 3 publications

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“…This research supported by Arifin & Oktavilia (2020) that E-money influences inflation in both the long and short term. The results of the study by Mahatir et al (2020) and Ramadhani & Nugroho (2019) also state that electronic money will increase the money supply, causing inflation.…”

Section: Discussionmentioning

confidence: 97%

The Impact of a Cashless Payment System on Inflation

Muslikhati¹,

Aprilianto

2022

JEP

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The rise of transactions without using money or what is commonly referred to as cashless transactions. Cashless transactions have several advantages, namely, functional, effortless, and quick. In addition, cashless transactions get an impact on monetary policy in Indonesia. The convenience obtained when conducting cashless transactions results in the acceleration of the velocity of money. Although the number of cash transactions in the community has decreased, the rate of money creates a high intensity with the use of cashless transactions. If the power of money circulation is high, it is feared that it will cause inflationary effects. This study aims to determine the impact of the cashless payment system on inflation. A quantitative approach was used in this study with secondary data which in the source obtained through documentation techniques obtained from Bank Indonesia (BI) and the Central Statistics Agency (BPS). from January 2009 until December 2020. The analysis technique uses multiple linear regression analysis. The results showed that the electronic-money variables had a significant negative effect, the debit card variables had a significant positive impact, the credit card variables had an insignificant negative effect, and the interest rate variables had a significant positive impact.

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Section: Discussionmentioning

confidence: 97%

The Impact of a Cashless Payment System on Inflation

Muslikhati¹,

Aprilianto

2022

JEP

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“…If this trend continues, the overall prosperity of society will deteriorate. Thus, money supply management must always be carried out with caution, taking into account the potential consequences (Mahatir, Aimon, & Sentosa, 2020;Angraini, 2012). This phenomenon will affect the sustainable economic development in Indonesia (Ronaldo & Suryanto, 2022;Ekananda & Suryanto, 2021).…”

Section: Introductionmentioning

confidence: 99%

Analysis of Economic Sustainability from Government Spending on The Inflation Rate in Indonesia: Effect from Intrest Rate and Money Circulatio

2022

QAS

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The Indonesian government must face the challenge of inflation which has an impact on the economic slowdown. Several economic observers project that inflation will get worse in 2023. From 2010 to 2019, the Consumer Price Index (CPI) inflation has never been below three percent and continues to range from 3.5 to 8 percent. Many suspects that the increase in government spending during the 2010-2019 period has caused a decrease in inflation while an increase in interest rates has caused an increase in inflation. The purpose of this study is to examine the effect of government spending on Indonesia's inflation rate from 2010 to 2019, as influenced by interest rates and money supply.The research model is quantitative using secondary data (time series) from 2010-2019. The method used is Ordinary Least Square (OLS). The findings indicate that the BI interest rate, the money supply (M1), and government spending all have a significant effect on Indonesia's inflation rate simultaneously. The results indicate that the BI interest rate and money supply (M1) have a partially negative and significant impact on Indonesia's inflation rate from 2010 to 2019, whereas government spending has a partially positive and significant impact on Indonesia's inflation rate from 2010 to 2019.

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The Impact of Electronic Money on Monetary Policy: Based on DSGE Model Simulations

Luo

Zhou

2021

Mathematics

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Starting with the interactive relationship between electronic money and household consumption stimuli, this paper deeply analyzes the changes in the behavior of each monetary subject under the impact of electronic money, and establishes a DSGE model based on the three economic sectors of family, commercial bank and central bank under the New Keynesian framework. On this basis, the impact of electronic money on savings, loans, output and the interest rate, and its impact on monetary policy, are described by numerical simulation. The simulation results show that: (1) electronic money has asymmetric effects on savings and loans, but an irrational deviation on households; (2) the influence of electronic money on the interest rate has a reverse effect, and the “inverse adjustment” of the interest rate increases the management difficulty of the micro subject to a certain extent, and affects the effectiveness of monetary policy; (3) the regulatory effect of price monetary policy is better than that of quantitative monetary policy, and electronic money has the effect of its risk restraining impact. Finally, based on the analysis, this paper gives policy recommendations.

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Stability of Money Supply, E-money, Interest Rate, and Inflation in Indonesia

Cited by 3 publications

References 0 publications

The Impact of a Cashless Payment System on Inflation

The Impact of a Cashless Payment System on Inflation

Analysis of Economic Sustainability from Government Spending on The Inflation Rate in Indonesia: Effect from Intrest Rate and Money Circulatio

The Impact of Electronic Money on Monetary Policy: Based on DSGE Model Simulations

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