The Intervention of Macroeconomic Variables on Monetary Stability in Indonesia: Error–Correction Model Approach
- DOI
- 10.2991/aebmr.k.200305.074How to use a DOI?
- Keywords
- ECM, cointegration, monetary stability
- Abstract
This study investigates the influence of macroeconomic variable interventions on monetary stability in Indonesia. The analysis model used is cointegration of Johansen-Juselius and error correction model (ECM). Data is used by time series from 1988 to 2018. The findings in the study show that in the long run Gross Domestic Product (GDP), economic openness, and inflation significantly affect the money supply in Indonesia. In the short term, economic openness significantly influences the money supply. Overall, the intervention of the real variable interest rate raises shocks to monetary stability in the long run, although in the short run it is able to maintain its balance. The Monetary Authority in Indonesia needs to make adjustments and integration in establishing policies to realize the sustainability of monetary stability in Indonesia.
- Copyright
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Mohammad Aliman Shahmi AU - Hasdi Aimon PY - 2020 DA - 2020/03/10 TI - The Intervention of Macroeconomic Variables on Monetary Stability in Indonesia: Error–Correction Model Approach BT - Proceedings of the 4th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2019) PB - Atlantis Press SP - 244 EP - 248 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200305.074 DO - 10.2991/aebmr.k.200305.074 ID - Shahmi2020 ER -