• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.393-402
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• 2021

This study aims to examine whether symmetric effects or asymmetric effects of exchange rates exist in determining the money demand in Indonesia. Simple-sum money and Divisia money were included in different models for comparison due to the financial developments in Indonesia. This study uses time-series data from 1996Q1 to 2019Q4 for the estimation. The nonlinear autoregressive distributed lag (NARDL) model is utilized to verify the asymmetric effects of exchange rates on money demand. The Augmented Dickey-Fuller and Phillips-Perron unit root tests were performed to verify the order of integration of the variables. The findings of this study revealed that the exchange rate is one of the most important determinants of money demand in Indonesia and the effect is asymmetric. The findings further indicated that money demand function, which incorporates Divisia monetary aggregate is parsimonious. Monetary targets such as money supply and interest rates are critical for monetary policy conduct to achieve inflation levels set by government. As the adoption of an inflation targeting framework needs to be in keeping with the flexible exchange rate system, the asymmetric effect of exchange rate changes can be used in exchange rate policy conduct to achieve financial system and price stability.

• The Journal of Asian Finance, Economics and Business
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• v.3 no.3
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• pp.57-65
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• 2016

The purpose of this paper is to investigate the volatility of both Islamic and conventional stock market in Indonesia with the aim of identifying the most appropriate model for risk management practice. The study considers GARCH as a genre of model to measure the volatility of stock market movement. The results support the view that each model shows specific volatility from both Islamic and conventional stock market in Indonesia. In Islamic stock market, volatility is affected by exchange rate and money supply (M1) but not interest rate as interest is prohibited in Islam. However, interest rate is found as a principal factor that affects volatility of conventional stock market. The outcomes of this paper are of particular significance to policy makers, as it provides guidelines to maintain economic health. Furthermore, the findings may assist practitioners to understand the consequences of macroeconomic factors such as exchange rate, money supply and interest rate, which are very crucial for the market stability of Indonesian stock market. The paper enhances the understanding of stock market volatility and proposes guidelines risk management practices.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.2
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• pp.143-149
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• 2020

Low inflation and sustainable growth have been the major macroeconomic goals being pursued by every developing country, Vietnam inclusive. The effect of inflation on economic growth has been intensively analyzed by a variety of studies, but the empirical evidence more often than not remains controversial and ambiguous. One common hypothesis of previous studies is that they have assumed that the effect of inflation on growth is symmetric. The main purpose of this study is to investigate the asymmetric effect of inflation and money supply on economic growth using the Nonlinear Autoregressive Distributed Lag approach introduced by Shin, Byungchul, and Greenwood-nimmo (2013) for Vietnam over the period 1990-2017. Empirical results provide evidence that the effects of inflation on economic growth are negative and asymmetric in the long run. The impact of money supply on growth is positive in both the short-run and long-run. Accordingly, the impact of the increase in the inflation rate is bigger than the decreasing in the long-run. This different impact is significant and high inflation will destruct economic activities. As a result, the study provides empirical evidence for the authorities to plan monetary policies and control the rate of inflation to achieve sustainable economic development in the long-run.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.8 no.12
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• pp.65-77
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• 1985

The mainpoints of General Theory is 1) the mainspring of economic activity is effective demand which can expand or control in relation to supply as a result of spontaneous decision by customer or government. 2) change in effective demand Produce change in output and employment in the same direction 3) which given productivity of labour the Vice level depend on the money supply affect the in downward direction 4) change in the money supply affect the economy through the rates of interest 5) the only automatic mechanism through which the economy can adjust itself to a deficiency of effective demand is the long process which unemployment reduces wage rates and consequently the demand for money and interest rates, above summarized contents are General Theory frame-work. The neo-classical macro general equilibrium theory, which has been reconstructed subsequent to Keyneses critism is treated the neo-classical macro-general equilibrium theory which inherits the classical theories of labour market and the aggregate production function, on demand side, it introduce the Keyneses macro-general equilibrium theory, which function through flexible movement of prices, wage and interest. Nowadays, Keynes General Theory is being developed into new dimension i, e. the macro-disequilibrium theory, and adequacy, and appropriateness of the theory and its significant contributions to modern economics are being reinterpreted and substantiated.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.9
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• pp.39-47
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• 2022

This study explored the effectiveness of the measures taken by the Jordanian Central Bank embedded in its monetary policy in encouraging banks to support investment. It aimed to explore the impact of this monetary policy on supporting credit-related decisions and the monetary policies that aim to support investment in Jordan. The targeted tools of the monetary policy are: (Overnight Deposit Window Rate, money supply, and exports). The researchers carried out an analysis to measure the effectiveness of the monetary policy in fostering investment in Jordan during the period 1992-2020. They carried out the time series analysis. They explored the stationarity of the time series. They used the ARDL model. It was found that the Overnight Deposit Window Rate has a negative significant effect on the gross fixed capital formation. It was found that the money supply has a positive insignificant effect on gross fixed capital formation. The researcher recommends using Overnight Deposit Window Rate in a manner that is consistent with the intended investment-related goals.

• 사회경제평론
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• no.38
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• pp.199-240
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• 2012

According to the Post Keynesian endogenous money theory, money is created by the bank deposit which is dependent on the banks' supply of loan. And the demand for loans is dependent on investment by firms. In the money creating process, real value(or investment) and money are connected with banks' credit. In this paper, we investigated Keynes and Post Keynesian endogenous money theory with critical reviews of Hwang (2005). We came to three conclusions. First, Post Keynesian endogenous money theory is based on Keynes' theory. Second, Keynes' endogeneity of money is essentially different from that of Wicksellian. Third, focusing on the differences of the starting point of the arguments not on the conclusions, two Post Keynesian views, namely horizontalists and structuralists are compatible with liquidity preference theory in the Keynes' system.

• 한국경영정보학회:학술대회논문집
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• 2007.06a
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• pp.661-666
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• 2007

MMORPG, massively multi-players in online role-playing game, is the most popular genre in online games. Because large number of players interacts with each other, virtual worlds in MMORPG are alike communities of real worlds. Moreover, players in virtual worlds trade game items with real money. This paper is to find impacts of real-money trading into real worlds, and game operators, by using two-period model between players of the game and the game operator. It was found that real-money trading benefits game operators, and there exists optimal supply of game items to maximize the profit of game operator. Moreover we found that the income disparity in real worlds could be decreased when real-money trading is allowed To support the analytical model, we used an empirical analysis using real-money trading data, and find the relationship among play time of MMORPG, transaction volume of real-money trading, and price of game items. In empirical analysis, it was found that real-money trading benefits game operators. Moreover, it was found that play time and price have positive relationship.

• The Journal of Industrial Distribution & Business
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• v.9 no.6
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• pp.15-24
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• 2018

Purpose - The adjustment of one country's monetary policy can cause the macroeconomic change of other countries. Due to this, this paper attempts to analyze the impact of China's monetary policy on South Korea's exchange rate. Research design, data, and methodology - Based on the flexible-price monetary model, sets of annual time series from 1980 to 2017 are employed to perform an empirical estimation. The vector error correction model is also used to exploit the short-run relationship between both of them. Of course, the South Korea's real GDP, the China's real GDP, South Korea's interest rate, the South Korea's interest rate and the South Korea's monetary supply are treated as independent variables in this paper. Result - The long-run findings reveal that the China's money supply has a negative effect on South Korea's exchange rate. Respectively, the short-run findings depicts that the China's money supply has negative a effect on South Korea's exchange rate. Of course, other variables selected in this paper also have an effect on South Korea's exchange rate whatever positive or negative. Conclusions - As the empirical evidence shows, the China's monetary policy has a negative effect on South Korea's exchange rate whenever in the long run or in the short run.

• Journal of Korea Technology Innovation Society
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• v.1 no.1
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• pp.96-105
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• 1998

Electronic cash affects central bank in many areas, in particular regarding the issuance of money, supervision of cashless payments, supervision of the banking system and monetary policy. The effects of electronic cash on central bank policies, the security and integrity of the payment system, and naturally also on single sector such as company engaged in the transport of money and valuables, depend mainly on the extent to which the new payment methods can replace cash. The possible development of electronic cash merits special attention from central banks for at least three reasons. First, central banks are concerned that the introduction of the new payment instrument should have no adverse effect on public confidence in the payment system and payment media. Second, although the substitution of electronic cash for other forms of money should not theoretically hamper central bank's ability to control the money supply, it might, however, have practial implications, at least in the long run, which need to be carefully examined. Third, because electronic cash may be used for payments of very small value, they have the potential, more than any other cashless instrument, to take over the role of notes and coins in the economy and, therefore, have implications for central bank's activities and revenues.

• KDI Journal of Economic Policy
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• v.12 no.3
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• pp.71-94
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• 1990

This paper reviews the rationale of monetary and banking intervention by an outside authority, either the government or the central bank, and seeks to delineate clearly the optimal limits to the monetary and banking deregulation currently underway in Korea as well as on a global scale. Furthermore, this paper seeks to establish an objective and balanced view on the role of the central bank, especially in light of the current discussion on the restructuring of Korea's central bank, which has been severely contaminated by interest-group politics. The discussion begins with the recognition that the modern free banking school and the new monetary economics are becoming formidable challenges to the traditional role of the government or the central bank in the monetary and banking sector. The paper reviews six arguments that have traditionally been presented to support intervention: (1) the possibility of an over-issue of bank notes under free banking instead of central banking; (2) externalities in and the public good nature of the use of money; (3) economies of scale and natural monopoly in producing money; (4) the need for macro stabilization policy due to the instability of the real sector; (5) the external effects of bank failure due to the inherent instability of the existing banking system; and (6) protection for small banknote users and depositors. Based on an analysis of the above arguments, the paper speculates on the optimal role of the government or central bank in the monetary and banking system and the optimal degree of monetary and banking deregulation. By contrast to the arguments for free banking or laissez-faire monetary systems, which become fashionable in recent years, monopoly and intervention by the government or central bank in the outside money system can be both necessary and optimal. In this case, of course, an over-issue of fiat money may be possible due to political considerations, but this issue is beyond the scope of this paper. On the other hand, the issue of inside monies based on outside money could indeed be provided for optimally under market competition by private institutions. A competitive system in issuing inside monies would help realize, to the maxim urn extent possible, external economies generated by using a single outside money. According to this reasoning, free banking activities will prevail in the inside money system, while a government monopoly will prevail in the outside money system. This speculation, then, also implies that the monetary and banking deregulation currently underway should and most likely will be limited to the inside money system, which could be liberalized to the fullest degree. It is also implied that it will be impractical to deregulate the outside money system and to allow market competition to provide outside money, in accordance with the arguments of the free banking school and the new monetary economics. Furthermore, the role of the government or central bank in this new environment will not be significantly different from their current roles. As far as the supply of fiat money continues to be monopolized by the government, the control of the supply of base money and such related responsibilities as monetary policy (argument(4)) and the lender of the last resort (argument (5)) will naturally be assigned to the outside money supplier. However, a mechanism for controlling an over-issue of fiat money by a monopolistic supplier will definitely be called for (argument(1)). A monetary policy based on a certain policy rule could be one possibility. More importantly, the deregulation of the inside money system would further increase the systemic risk inherent in the current fractional banking system, while enhancing the efficiency of the system (argument (5)). In this context, the role of the lender of the last resort would again become an instrument of paramount importance in alleviating liquidity crises in the early stages, thereby disallowing the possibility of a widespread bank run. Similarly, prudential banking supervision would also help maintain the safety and soundness of the fully deregulated banking system. These functions would also help protect depositors from losses due to bank failures (argument (6)). Finally, these speculations suggest that government or central bank authorities have probably been too conservative on the issue of the deregulation of the financial system, beyond the caution necessary to preserve system safety. Rather, only the fullest deregulation of the inside money system seems to guarantee the maximum enjoyment of external economies in the single outside money system.