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This study aims to analyze the response of demand for money to shocks in macroeconomic variables such as income, inflation and interest rates in Indonesia. The study used time-series data from 2008: Q1 - 2019; Q4 with SVAR approach. Based on the result there was a positive response from money demand to income shocks but a negative response to inflation and interest rate shocks. Income variable is volatile and contributes the most to money demand compared to inflation and interest rates.

MONEY DEMAND ANALYSIS IN INDONESIA: THE SVAR APPROACH