Asymmetric Transmission of the Monetary Policy: Empirical Evidence from the Consumer Credit Rates in Indonesia

  • Abstract This paper empirically examines asymmetric transmissions from money market rates to various consumer rates throughout a sample period that comprises monetary policy shifting in Indonesia from 2011 to 2017. We adopt modification of Asymmetric Error Correction Models (AECM), which incorporate three-error correction term. This allows us to inspect the different adjustment when the disequilibria are: large-positive, large-negative, and small. Our findings shows that there are varying asymmetric adjustment in response to different shocks across products in lending market. Thus, the monetary authorities should notice that both easing and tightening monetary policy appear to have varying impact to different credit market.…
    03 Oct
    03 Oct
  • Abstract The 2018 Asian Games was the biggest sports event in the history of Asian Games. Held in Indonesia, the sports event contested 40 sports and 465 events while served for 11,326 athletes from 45 Asian countries, apart from hundreds of thousands of international visitors, officials and journalists. While required a considerable amount of public spending, such a massive scale of event generated large economic stimuli to Indonesian economy, among which were the spending of international participants and spectators. This study aims to estimate the determinants of international participants and spectators’ spending. Data were collected through face-to-face interviews during the event. The findings suggest that the spending and spending composition of international participants and spectators vary across types of participants, country of origins, gender, age group and traveling experiences. The academic and policy implications of the findings are discussed.…
    29 Jul
    29 Jul
  • Abstract This study aims to delve deeper into the discussion on how the financial inclusion progress in Indonesia could be affected by the growing fintech industry. We shall comprehensively discuss the current state of the platforms in the country, including the potential benefits and challenges. Such afflictions include the hugely-concentrated deposit market, to begin with and the discrepancies between regulators and the technological changes, while the high internet and mobile phone penetration are only one of the many advantages the country are endowed with. The study aims to highlight the challenges faced in increasing financial inclusion before the fintech platforms begin to flourish and how they differ to the current condition. Novel and relevant policy recommendations are also provided in the latter parts of the discussion.…
    02 Jun
    02 Jun
  • Abstract Indonesia decentralization policy is an expenditure type of decentralization. It has evolved from setting functional assignments to coordination of expenditure programs across level of governments. This study will compare type of cooperation that has taken place in three sectors of expenditure programs: (1) environmental – carbon emission mitigation programs, (2) infrastructure programs, and (3) social assistance program. We investigate challenges and opportunities of central government support that can still be salience for the sub-national and local governments involvement on those expenditure programs.…
    23 May
    23 May
  • Abstract This paper attempts to analyze economic integration of China and Southeast Asian countries. This paper adopts several methods: One, stationarity for correlation, Error Correction Model (ECM) for short-run relation and Cointegration for long-run relations. Two, Structural Vector Autoregression (SVAR) analysis to identify the cause and impact. As stock market index follows real sector performance this paper utilizes: One, elasticity analysis of economic growth between China and these countries as a proxy for real sector economic relations between them and two, descriptive statistical analysis on real effective exchange rate as well as Current Account Balance as a proxy of external economic performance between them. In correlation analysis, this paper found that one, stationarity of each country is difference at level; two, short-run economic relations (ECM) between China and these Southeast Asian countries and three, they have long-run economic relations. In causality, this paper found that China affects all of these Southeast Asian countries and no causality between Singapore and Philippines. In term of real sector analysis this paper found that, one, economic growth in China significantly affects all of these countries’ economic growth. Two, external economic performance of these countries are difference with special finding on Indonesia’s current account.…
    28 Mar
    28 Mar
  • Abstract One of the main challenges to Universal Health Coverage in developing countries like Indonesia is a high prevalence of those working in the informal sector that by the system they have to voluntarily register in the National Health Insurance System (NHIS) as Self Enroled Member. Therefore, challenges are administrative difficulties in recruiting, registering and collecting regular contribution in the most of cost-effective way. This condition hinders some individuals for being covered NHIS. This research aims to analyze qualitatively some aspects that influence the decisions of individuals or households to join NHIS in Indonesia. By conducting in-depth interviews with some of the informants who were surveyed in 2014, and some new additional informants in the three selected regions of Deli Serdang, Pandeglang, and Kupang, the study found that regional socio-economic characteristics, demographics, culture and belief systems have varying degrees of influence on individual decisions to join the NHIS. The general pattern across all the regions reveals three main factors that influence the decisions of those working in the informal sector to join the NHIS: health conditions; family and peers; and existing knowledge and experience. High-risk individuals tend to join the NHIS through interactions with health workers, family members, and friends, concerning their illnesses or health risks. These groups tend to advocate NHIS a means of reducing overall health expenses, particularly for expensive procedures. This creates an adverse selection problem and a pressing challenge for Social Security Agency for Health (SSAH) to attract healthy, young and low-risk groups in the informal…
    19 Mar
    19 Mar
  • Abstract The undergraduate admissions in Indonesia’s public universities are interestingly conducted in a two-fold system. Students are first considered for the merit-based ‘Undangan’ admissions, whereas the test-based admissions are conducted afterwards. This study aims to discuss the differences of academic performances of students entering universities through the merit-based and test-based admissions. Our discussion utilizes a comprehensive data of 5,470 freshmen admitted during the period 2001 to 2017 at the Faculty of Economics and Business of Universitas Indonesia. We observed the differences using regression and matching estimates controlling the students’ characteristics and demographics. The findings suggest that students admitted through the Undangan system perform generally better. However, such difference of academic performance diminishes across time. Furthermore, we describe the potential problems and, at the same time, progress for the country’s education system posed by the phenomenon.…
    21 Feb
    21 Feb
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