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Journal : Jurnal Ekonomi Pembangunan

The Effect of Inflation, Interest Rates, Exchange Rates, and Real GDP on Financial Deepening in Indonesia: Evidence from Error Correction Model Approach Devi Putri; Devi Valeriani; Anggraeni Yunita
Jurnal Ekonomi Pembangunan Vol 19, No 2 (2021): Jurnal Ekonomi Pembangunan
Publisher : Department of Development Economics, Universitas Sriwijaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.29259/jep.v19i2.14505

Abstract

Financial deepening is a benchmark for seeing the role of financial services in the economy, as measured by the ratio between the money supply (M2) and Gross Domestic Product (GDP). This study aims to determine and analyze the effect of inflation, interest rates, exchange rates, and real GDP on financial deepening in Indonesia in the long and short term. The type of research used is quantitative. Sources of data used in this study are secondary data sources obtained from Bank Indonesia (BI) and the Central Bureau of Statistics (BPS). Data analysis using the Error Correction Model (ECM) method. The results show that in the long run, inflation is negatively and insignificantly effect to financial deepening, interest rates are negatively and significantly effect to financial deepening, while the exchange rates and real GDP have a positive and significant effect to financial deepening in Indonesia. Meanwhile, in the short term, inflation is negatively and insignificantly effect to financial deepening, interest rates are negatively and insignificantly effect to financial deepening, exchange rates are positively and insignificantly effect to financial deepening, while real GDP has a positive and significant effect to financial deepening in Indonesia.
Co-Authors Agung Rizki Putra Aja Nasrun Ameilia, Susan Ana Oktaria Indah Andi Kurniawan Karta Negara Andi Yusfany Anggraeni Yunita Aning Kesuma Putri Aning Kesuma Putri, Aning Kesuma Apriyadi, Rion Armaya, Armaya Ayu Wulandari Ayu Wulandari David Reeve Desy Yuliana Dalimunthe Desy Yuliana Dalimunthe, Desy Yuliana Devi Putri Dian Prihardini Wibawa Duwi Agustina Edih Mulyadi Ega Mawarni Eka Solid Diana Eka Yuliani Endang Bidayani Erni Yusnita Eva Helda Faisal Akbar, Muhammad Feraliani Feraliani Fitra Hartini Fitra Hartini Fitriyanti, Eka Fitriyanti, Eka Giyatmi Giyatmi Hadinata, Erlangga Hamsani Hamsani Hamsani Hamsani, Hamsani Hamzah Hamzah Hartini, Fitra Herry Marta Saputra Husril Husril Indah Puspita, Indah Ineu Sulistiana Khairul Amri Kurniawan Kurniawan M. Faisal Akbar Maheswara, Perpetua Westri Mardani Mardani Mardani Mardani Marlina Marlina Marlina Marlina Maya Yusnita Misbahul Munir Muhammad Dedy Palguno Muhammad Faisal Akbar Mulyadi, Edih Mulyani Mulyani Mustofa Tohari Nabilah, Adzanah Firyal Nanang Wahyudin Nizwan Zukhri Nopriana, Anisa Nurdianti, Lili Nurhadini Nurhadini Nurhayati Nurhayati Nurwasya Nurwasya Nurwasya, Nurwasya Nurwijayanti Otrinawa, Agung Panggio Restu Wilujeng Permadi, Andi Puput Saddiyah Putra, Agung Riski Ratnasari, Kania Rendy Rendy Reniati Revy Safitri Rianto Rianto Ristika Oktavia Asriza Roanisca, Occa Rozi Rozi Rozi, Rozi Rulyanti Susi Wardhani Rusdi Rusdi Rusdi Rusdi SATRIYAS ILYAS Sella Agustina Sella Agustina Sembiring, Rinawati Sugeng, Novita Widyastuti Suhartono Suhartono Tiara Amiza Vebtasvili Vira Augusria Zikri Rahmani