Open AccessPENGUJIAN NETRALITAS UANG DAN INFLASI JANGKA PANJANG DI INDONESIA
Author(s) -
Arintoko Arintoko
Publication year - 2011
Publication title -
deleted journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 4
ISSN - 1410-8046
DOI - 10.21098/bemp.v14i1.457
Subject(s) - economics , cointegration , monetary economics , short run , inflation (cosmology) , endogeneity , neutrality , stock (firearms) , order (exchange) , econometrics , macroeconomics , finance , mechanical engineering , philosophy , physics , epistemology , theoretical physics , engineering
This paper investigates long-run neutrality of money and inflation in Indonesia, with due consideration to the order of integration, exogeneity, and cointegration of the money stock-real output and the money stock-price, using annual time-series data. The Fisher-Seater methodology is used to do the task in this research. The empirical results indicate that evidence rejected the long-run neutrality of money (both defined as M1 and M2) with respect to real GDP, showing that it is inconsistent with the classical and neoclassical economics. However, the positive link between the money and price in long run holds for money defined as M1 rather than M2, which consistent with these theories. In particular, besides the positive effect to long-run inflation, monetary expansions have long-run positive effect on real output in the Indonesian economy. JEL Classification: C32, E31, E51Keywords: long-run neutrality of money, inflation, unit root, exogeneity, cointegration