DETERMINANTS OF INDONESIA’S INCOME VELOCITY OF MONEY

Authors

Susan Sunila Sharma, Deakin University - AustraliaFollow
Ferry Syarifuddin

Document Type

Article

Abstract

Using monthly time-series data and both short-and long-run models, our paperexamines the determinants of Indonesia’s income velocity of money. Our findingssuggest that in the long-run, tax revenue, short-term interest rate, industrial productionand, in the short-run, money demand, significantly determine income velocity ofmoney. Our analysis suggests that the effect on income velocity is mostly over thelong-run as most determinants are dormant in the short-run. The implication from apolicy perspective is that shocks are unlikely to burden income velocity over short timehorizons.

Recommended Citation

Sharma, Susan Sunila and Syarifuddin, Ferry (2019) "DETERMINANTS OF INDONESIA’S INCOME VELOCITY OF MONEY," Bulletin of Monetary Economics and Banking: Vol. 21: No. 3, Article 4.
DOI: https://doi.org/10.21098/bemp.v21i3.1006
Available at: https://bulletin.bmeb-bi.org/bmeb/vol21/iss3/4

First Page

323

Last Page

342

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Australia

Affiliation

Deakin University