Open AccessMONETARY POLICY TRANSMISSION AND CREDIT CARDS: EVIDENCE FROM INDONESIA
Author(s) -
R. Eki Rahman,
K.P. Prabheesh
Publication year - 2019
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 4
ISSN - 2460-9196
DOI - 10.21098/bemp.v22i2.1039
Subject(s) - consumption smoothing , monetary policy , credit card , monetary economics , transmission (telecommunications) , economics , consumption (sociology) , credit channel , transmission channel , business , financial system , macroeconomics , inflation targeting , payment , business cycle , finance , computer science , telecommunications , social science , sociology
This paper empirically tests the dynamics of credit cards and monetary policy in thecontext of Indonesia. Using monthly data from 2006 to 2018 and a structural vectorautoregressive model, our findings indicate that credit card usage is mainly drivenby Indonesia’s fast economic growth over the last decade, which indeed reflects therole of credit cards in consumption smoothing. The study also finds that monetarypolicy transmission through the lending channel is weak, with a more prevalent rolefor exchange rates and global oil prices in the transmission process.