Open AccessPERBANKAN SYARIAH DAN PERTUMBUHAN EKONOMI INDONESIA
Author(s) -
Ali Rama
Publication year - 2013
Publication title -
signifikan
Language(s) - English
Resource type - Journals
eISSN - 2476-9223
pISSN - 2087-2046
DOI - 10.15408/sjie.v2i1.2372
Subject(s) - granger causality , causality (physics) , inflation (cosmology) , islamic banking , economics , islam , monetary economics , capital (architecture) , capital market , sukuk , islamic finance , classical economics , macroeconomics , econometrics , finance , philosophy , physics , theology , archaeology , quantum mechanics , theoretical physics , history
The paper empirically examines the dynamic interaction between Islamic banking development, capital market, trade activities, inflation and economic growth in Indonesia using battery of time series techniques. The study documents a long-run equilibrium between Islamic banking, capital market, trade activities, inflation and economic growth. Granger causality test reveals that there is a bidirectional causality between Islamic banking-growth in Indonesia, the finding accords with “the feedback hypothesis” or bidirectional causality view”. Based on the VDCs, the study discovers that the variations in the economic growth rely very much on its own innovation. The finding also shows that Islamic banking financing innovation significantly explains the variation in economic growth. To further promote contributions of Islamic banking to economic growth, the authority should provide friendly policies to accelerate its development in the countryDOI: 10.15408/sjie.v2i1.2372