PRAKTEK KEBIJAKAN MONETER ISLAM

Kebijakan moneter Islam tidak mengenal adanya money multiplier seperti pada praktik kebijakan moneter konvensional. Dan dengan menerapan kebijakan ekonomi moneter Islam secara optimal diharapkan akan memberikan berbagai dampak positif yaitu, memelihara keselarasan dan keserasian sektor riil dan sektor keuangan, meningkatkan kelancaran aliran distribusi sumber uang, sehingga sektor keuangan akan terhindar dari penumpukan uang, menghindari “penggandaan” uang tanpa adanya pertumbuhan nyata di sektor riil, meningkatkan resistensi ekonomi dan keuangan terhadap kemungkinan terjadinya krisis, menambah saluran untuk adanya surplus dana di sektor perekonomian, memaksimalkan distribusi sumber daya dalam perekonomian.

PRAKTEK KEBIJAKAN MONETER ISLAM

Kebijakan moneter Islam tidak mengenal adanya money multiplier seperti pada praktik kebijakan moneter konvensional. Dan dengan menerapkan kebijakan ekonomi moneter Islam secara optimal di harapkan akan memberikan berbagai dampak positif yaitu, memelihara keselarasan dan keserasian sektor riil dan sektor keuangan, meningkatkan kelancaran aliran distribusi uang, sehingga sektor keuangan akan terhindar dari penumpukan uang, menghindari "penggandaan" uang tanpa adanya pertumbuhan nyata di sektor riil, meningkatkan resistensi ekonomi dan keuangan terhadap kemungkinan terjadinya krisis, menambah saluran untuk adanya surplus dana di sektor perekonomian, dan memaksimalkan distribusi sumber daya dalam perekonomian.

Does the Money Multiplier Hold in Pacific Island Countries? The Case of Papua New Guinea

This is the first study to systematically assess the significance of the standard money multiplier vis-à-vis the bank credit transmission channel in the case of Pacific Island Economies, focusing on Papua New Guinea. The vector autoregressive model comprising six variables—interest rate, inflation rate, loans, deposits, reserve money, and real output—was estimated using quarterly data for the period 1980q1 to 2017q4. We applied the ordinary least squares (OLS) method to estimate the system of vector autoregressions (VARs). The estimation was conducted for the full and sub-sample periods. From the impulse response functions generated, the results suggest that the money multiplier does not hold and that the transmission to bank credit appears weak. It seems that the ability of the Central Bank to make loanable funds available through its conduct of monetary policy may not enhance private sector credit. On the other hand, there appears to be a significant and positive association between bank deposits and credit, suggesting that bank deposits and credit are endogenous and demand driven.

Determinants of Money Supply in Nigeria

Studies on money supply determinants focus on the Classicists or Monetarists, Keynesians and post-Keynesians variables like income and money multiplier. This research extends the literature on money supply determinants to include the influence of financial liberalization on money supply with a reference to Nigeria between 1980 and 2019, using the Autoregressive Distributed Lag (ARDL) approach. Data used for the study were collected from the 2019 CBN Annual Statistical Bulletin. The study found that financial liberalization is an important factor in determining money supply in Nigeria, in addition to currency ratio, required reserve ratio and high-powered money. As a result, the extent of the liberalization of the financial sector matters in decisions on the regulation of money supply in the economy.

Money stock determination process and money multiplier: case of South Korea

Purpose This study aims to re-examine the money stock determination process for South Korea under the assumption of the existence of potential asymmetric (non-linear) relations (a mechanism) between the money stock and the monetary base. Because, the true and detailed diagnosis of this mechanism is crucially important for the Bank of Korea’s (BOK)’ monetary policy, as this country has been adopting an inflation targeting policy (ITP) for a long-time. Design/methodology/approach This paper applies the non-linear autoregressive distributed lag model by Shin et al. (2014). This model separates the original series of the monetary base into their increases (+) and decreases (−). The increases (+) and decreases (−) done by the BOK correspond to expansionary and contractionary monetary policies, respectively, in this study. Findings The empirical findings are two-fold. First, the money stock determination process in Korea has a non-linear (asymmetric) structure. This means that increases (+) and decreases (−) in the monetary base have asymmetric (different) impacts on money stock. Second, the BOK’s only expansionary monetary policy exhibits exogenous nature money stock determination with an almost stable money multiplier. These findings may help the BOK to take preventive precautions in its monetary policy implementations. Originality/value This study with its methodology may help the BOK to take preventive measures in its ongoing ITP proactively.

Money Multiplier Bias Due to Informal Sector: An Extension of the Existing Money Multiplier

To demonstrate the impact of informal economy on the official money multiplier in currency supply, we present an extension of the basic money multiplier model. The influence of economic policies may differ if they are based only on official statistics without considering the informal sector. Since most of the activities in informal sector are hidden from authorities, it is widely assumed that these activities are based on cash transactions, a part of total currency that cannot be attracted towards deposits due to the holder’s fear of prosecution and taxation, etc. Therefore, it is expected that such currency holdings can give biased results by playing a role in the money multiplier, a phenomenon that is usually ignored while attempting to alter money supply. The article also indicates that because of informal sector, the currency deposit ratio in the money multiplier is smaller than expected (depending on size of the informal sector), leading to a larger multiplier effect. JEL Codes: E26, E51, O17

Soft monetary policy in a sustainable economy as a rigid game

Over the past decade, central banks in a majority of developed countries injected astonishing amounts of money into national and international economies in the hope of helping real sectors and with worries of high inflation. Neither of these came true. This paper describes the reasons for such unusual dynamics using a case of the sustainable economy. The three factors considered include the increased propensity to save, the decreased money multiplier, and substantial growth in the financial markets. The mathematical model studies the effect of the new money created on the real sector via the effect on real consumption depending on the share of the new money received by the less and more affluent part of the population. The results suggest, that the higher is the proportion of new money allocated to the poorer part of the society, the higher is the effect of overall money on the real sector if the propensity to consume in this part of the population is held constant.