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All Journal Al-Kharaj: Journal of Islamic Economic and Business
Mita Apriani
Economics Development Studies Study Program, University of Mataram
Economics, Econometrics & Finance

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Analysis of Factors Influencing the Demand for Money in Indonesia for the Period 2010Q1-2024Q4 Mita Apriani; Ida Ayu Putri Suprapti
Al-Kharaj: Journal of Islamic Economic and Business Vol. 8 No. 1 (2026): All articles in this issue include authors from 3 countries of origin (Indonesi
Publisher : LP2M IAIN Palopo

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.24256/kharaj.v8i1.9585

Abstract

M2 money demand in Indonesia is influenced by crucial macroeconomic factors such as real GDP, inflation, BI Rate, and economic uncertainty, but their effects are not empirically consistent. This study aims to analyze the influence of these variables on M2 money demand for the 2010Q1-2024Q4 period. Using a quantitative approach with secondary quarterly time series data from BPS, BI, and FRED (60 observations), the analysis was conducted through the Error Correction Model (ECM) in EViews 10 including the ADF test, OLS, Engle-Granger cointegration, and classical assumption tests. The results show that real GDP has a significant positive effect in both the long term (β = 2.153708; p = 0.0000) and short term (γ = 0.287925; p = 0.0361), while inflation, interest rates, and the uncertainty index are insignificant. ECT = -0.151084 (p = 0.0084) indicates an adjustment of 15.11% per period. The study concludes that GDP is the main driver of M2 with implications for monetary policy focusing on economic growth.
Co-Authors Ida Ayu Putri Suprapti